Don’t exhaust EPF savings despite Covid-19 crisis — Alizakri

KUALA LUMPUR (April 22): The Employees Provident Fund (EPF) has urged its contributors to be prudent in withdrawing their savings via the i-Lestari programme amid current challenging conditions, so they would not jeopardise their future.

In an interview with Astro Awani today, EPF chief executive officer Tunku Alizakri Alias reminded the public that their savings are for the future and must not be exhausted during the current crisis.

“I would like to remind our contributors that their EPF savings are for the future. There needs to be a balance. We should not be overly worried about the current situation and finish our savings which are meant for the future. While there is a crisis, I’m sure that the crisis will eventually end,” he said.

Alizakri highlighted some worrying findings which were derived from the fund’s data, which showed 71.4% of those who are self-employed have less than one month’s worth of savings, while 82.7% of those working in the private sector have only saved enough to support themselves for less than two months.

He noted that the surge in applications for the i-Lestari programme — which allows contributors to withdraw RM500 per month for 12 months from their Account 2 — was due to the fact that the programme was introduced prior to the government’s unveiling of the PRIHATIN stimulus package.

The Ministry of Finance yesterday said 1.5 million applications, out of a total of 2.8 million applicants, for the i-Lestari facility for May, had been approved as at April 17.

However, given the various financial assistance offered by the government which includes the moratorium on bank loans, suspension of insurance and takaful premium, as well as discounts on electricity bills, Alizakri said EPF contributors should be more prudent in applying for the i-Lestari facility.

Besides that, he also urged SMEs to take advantage of the assistance provided by the government, noting there are currently about 480,000 SMEs registered with EPF, which are providing jobs for seven million Malaysians.

“We did some analysis and found that with the impact of the MCO (Movement Control Order), if even 1% of our SMEs fail, more than 60,000 jobs will be lost. This will also translate to a 0.6% impact to Malaysia’s GDP,” Alizakri said.

The EPF chief said the Covid-19 pandemic came at a time when the global economy was already on an unstable footing, given issues such as the US-China trade war, Brexit, as well as the cut in US interest rates which triggered cuts in policy rates by other central banks around the world

Malaysia was also affected by the banning of palm oil in Europe and more recently, the plunge in crude oil prices, he said.

Alizakri said the outbreak had a multiplier effect on the already unstable global economy, adding that the current global crisis will be three to five times worse than the Global Financial Crisis in 2008, and also worse than the Great Depression in the 1930s.

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