KUALA LUMPUR (Nov 20): As of Oct 5, 2023, the Employees’ Provident Fund (EPF) Account 2 Support Facility Programme (FSA2) has received a total of 223,018 applications, with only 29% or 64,965 applications approved, said Finance Minister Datuk Seri Anwar Ibrahim.

These approvals, processed by MBSB Bank and Bank Simpanan Nasional (BSN), involve a total funding of RM1.3 billion, Anwar stated in a written reply to Datuk Mohd Suhaimi Abdullah (PN-Langkawi) on Monday.

FSA2 is a programme designed to assist EPF members in obtaining personal financing from banking institutions. Currently, two banks are participating in FSA2 — MBSB and BSN.

FSA2 offers a maximum financing amount of RM50,000 (subject to EPF Account 2 balance) and a repayment period of up to 10 years. Among the conditions is that the applicant must have a minimum of RM3,000 in EPF Account 2.

To a separate question from Zulkifli Ismail (PN-Jasin), Anwar stated that, as of Sept 30, 2023, a total of 6.3 million EPF members under the age of 55, or 48%, have a savings balance of less than RM10,000 in their EPF accounts. This is an increase from the 4.7 million members representing 37% of EPF’s total members that were recorded in April 2020, before the introduction of special withdrawals related to Covid-19.

With savings below RM10,000, contributors are expected to have a retirement income of less than RM42 per month for a 20-year period, said Anwar, who is also Malaysia’s prime minister.

Anwar highlighted that the issue of insufficient EPF savings is severe, especially considering Malaysia’s rapidly ageing population, which will impact the country’s economy and productivity, and the social well-being, quality of life, and health of its people.

In an effort to enhance retirement savings and encourage voluntary contributions, Anwar said the government, through Budget 2024, has increased the government matching contribution limit to RM500 per year, under the i-Saraan programme that allows self-employed EPF members or those without a fixed income to make voluntary contributions.

Additionally, under the i-Suri programme — which allows housewives registered under the National Database on poverty (e-Kasih) to contribute to the EPF — housewives under 55 registered in the e-Kasih database can receive a matching contribution incentive, with a lifetime incentive capped at RM3,000 per individual and an annual matching incentive limit of RM300.

The EPF has also implemented various strategies, including allowing members to contribute beyond the 11% statutory rate and for them to make voluntary contributions with an annual limit of RM100,000, starting from June 1, 2023.

The government has also implemented outreach campaigns such as “Jom Tambah”, and increased mobile teams, particularly in remote areas, to engage more Malaysians to contribute to the EPF.

“EPF has initiated collaborations with agencies and gig platform providers, such as Grab Malaysia and GoGet Malaysia, to facilitate direct contribution channels for gig workers, simplifying their retirement savings process,” Anwar added.

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