Age 60 too late for EPF withdrawal

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KOTA KINABALU: The proposal to increase the age limit for full withdrawal of Employees Provident Fund (EPF) savings from the current 55 to 60 years old has not gone down well with contributors saying they should be allowed to utilise their money sooner than later.

A random survey showed contributors disagreed with the proposal to allow EPF to hold their money for an additional five years.

Mariani Majid, a 34-year-old teacher from Kota Belud, said 55 is old enough, and not too old to cash out and find a better use for her EPF contributions.

“I strongly disagree. People should start planning and managing their finance for their retirement, at least a few years before they actually retire.

“If they can only get their money at 60, it is already too late to do anything meaningful with it,” she opined.

Mariani said that even if the contributors are not planning on using the money for more profitable investment and simply want to spend them for holidays or other purposes, it is within their rights to do so.

“Workers should be allowed to enjoy and use their hard-earned savings when and how they want it, while they still can. For me, I would choose 55, but maybe there are people who would prefer to let EPF keep their money longer. So, why not make it an option, allow people to withdraw either at 55 or 60.

“I heard that EPF is now asking everyone to choose, but how do we even know if they will be transparent and not tell us the majority agreed with the proposal when in fact it is the other way around and simply go ahead with the plan,”said the mother of two.

Mariani suggested EPF carry out a transparent online voting process where contributors can see their votes in real time as they choose either ‘yes’ or ‘no’.

The list of people who have voted should be accessible to the public, with every name and their votes clearly stated. She said this way everyone would be able to check their own votes and even count the total votes if they want to.

“If the majority say yes, then we will have to accept it. It’s a democracy, every vote counts,”she said.

Another respondent who shared his view on the hotly debated issue, said it is outright wrong for the government to hold the workers’ money longer for its own benefit.

Paul Anthony, a pilot, said that at age 60, all that the workers could probably do with the money is to use it for their medical bills.

“EPF is trying to prolong the withdrawal to squeeze more profit from the contributors’ money. If you ask any sensible investor, the interest rate paid out by EPF is actually very low.

“They should be able to give more returns if not for how they mismanaged the fund, and this is the main concern of investors, us. How much do we get for letting EPF make profit using our hard-earned money,” he asked.

Paul believes that EPF should get the input and consent from the contributors before going ahead with the plan, a view shared by another respondent.

Syed Zaifullah, a doctor, said, EPF should not simply proceed with the plan, even if the public did not clearly express their disapproval.

“Just because there were not many people that have been vocal, not many have been responding to the proposal by saying no, it does not mean that the majority are saying ‘yes’ to it. EPF must not take the silence of the people as implied consent.

“The people, on the other hand, should speak up and make it clear that they reject the extension. They should even ask for the current age limit to be reduced. The earlier we can use the money, the better. We can plan for better investment while we are still young and not too old to do it,”he said.

Another teacher, Melah Han, said she had opted for pension instead of EPF scheme but even she was not happy with the age extension.

“I can only imagine how those who have chosen to stick with EPF feel. People should not be denied access to their money. Let them use it how they want it. If they want to use it to build a house, to spend it on the Haj, or whatever, let them use it,”she said.

Reza Adinata, 35, also disagreed with the plan, saying that most people would want to make full withdrawal at 55.

Extending the age limit another five years, he said, would bring more harm than good, especially for those in need of extra cash to support their family and their health at later age.

“We should let people use their money to transform their lives, for investment or to start a business while they still have the health, energy and motivation to do it. The low income, those with small salary, will be greatly affected.

“Holding their money is a step backward. First of all, it is unlikely their EPF will increase significantly after five years as the interest given is not that much. In fact, EPF interest is very low compared to most other investments.

“Secondly, most private companies view non-skilled workers aged above 50 as liabilities. Instead of holding their money, I think the government should help these senior workers by giving them suitable courses, including on how to properly manage their money as well as giving them skills that would help them maintain steady income after retirement,” he said.

Shah Mirza Abdul Majin in rejecting the age extension, said people may have other plans on how to utilize the money instead of just letting it sit to collect minimal interest in EPF.

“I think it is not appropriate because 60 years old is simply too late and people may not have much time left to enjoy the money they have saved from working all those years. After all, it’s their money, it’s their rights to decide how to use them,”he said.

Fitness instructor, Leslie Jane Jainol, said EPF should keep the age limit for withdrawal as it is.

“I think 55 is just a nice age, the right time to cash out on your savings. We will never know whether we can live up to 60 or not. More importantly, it is our money and it’s up to us to decide where to invest next,”she added.

Not all were against the plan, however. Simbih Gilingan, a retired teacher, believes that if one can manage without withdrawing his or her EPF, if they do not need it urgently, then it is better not to withdraw.

“I withdrew from my one of my EPF accounts when I was 55 and received RM200,000. I kept the other one and only withdrew it in 2012 and got another RM150,000. I think 60 is okay,” he said.

EPF, on Monday, announced that it has launched four initiatives to improve its current scheme, one of which was to align the full withdrawal age with the minimum retirement age as determined by the government.

Chief Executive Officer, Datuk Sharil Ridza Ridzuan, said the changes were aimed at addressing issues of EPF members having inadequate retirement savings, and members will be asked to consider two proposals – extend full withdrawal age from 55 to 60 years on staggered basis over 15 years, or maintain the age 55 withdrawal for existing savings and introduce a new age of 60 for withdrawal for those working past the age of 55.

Despite the changes in full withdrawal age, the existing pre-retirement withdrawals remain unchanged.