KUALA LUMPUR: The Employees Provident Fund (EPF) does not expect much liquidity issue despite more than RM100 billion outflow expected from the new i-Citra and two other similar withdrawal schemes previously.
The i-Citra initiative, under the latest RM150 billion Pemulih stimulus, is expected to see a RM30 billion drawdown by the EPF members.
The latest scheme will add to an estimated RM80 billion from i-Lestari and i-Sinar introduced previously.
The EPF chief executive officer Datuk Seri Amir Hamzah Azizan said the pension fund would be able to manage such drawdown as long as it could plan and adjust its portfolio along the way.
“The key for us to make sure is we do not lose the mandate. At the end of the day, we must remember that we must also continue to address the pension issue for the nation. If we allow things to drain out, which already is a problem, it will become an unmanageable problem,” Amir Hamzah said at a “MIDF Conversations: webinar today.
The session was moderated by MIDF group managing director Datuk Charon Mokhzani.
Still, Amir Hamzah said the i-Citra initiative, along with i-Sinar and i-Lestari, was a tough decision to make, as the EPF was mandated to help Malaysians to look after their retirement.
He said such decision needed to be made as the country was facing an unprecedented Covid-19 challenge.
As of December 2020, the EPF fund size stood at RM998 billion.
In 2020, EPF saw RM20.1 billion net inflow, which was 35.4 per cent lower than the RM31.1 billion net contribution received in 2019, amid the pandemic.
The net contributions fell even as withdrawals rose 30.1 per cent year-on-year to RM58.3 billion on the back of only 3.3 per cent year-on-year increase in contributions to RM78.4 billion in 2020.
Under i-Citra initiative, all members below the age of 55 are eligible to apply.
They can withdraw up to RM5,000 subject to their total combined balance in both Accounts 1 and 2.
The approved withdrawal amount will be paid for a period of up to five months, with a fixed monthly payment of RM1000 per month subject to savings balance and a minimum of RM50.
Amir Hamzah said the i-Citra was designed in such a way where the first drawdown would come from EPF member’s Account 2 first, which is an account that has always been accessible to them under certain circumstances.
Only if it is inadequate, EPF then will allow members to withdraw their savings from Account 1, which initially set up for members to withdraw as they reached the age of 55.
“We are trying to find that balance between helping people and making sure that they also have adequate retirement fund,” he said.
Source: New Straits Times
