EPF is now refining the i-Sinar withdrawal facility and is expected to provide further details today
by RAHIMI YUNUS / pic by TMR FILE
THE Employees Provident Fund’s (EPF) i-Sinar facility allows eligible members to make withdrawals from their retirement savings as part of a government scheme to support the country’s coronavirus-hit economy.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said the EPF has allocated RM70 billion for the initiative, allowing an estimated eight million subscribers to withdraw a maximum of up to RM10,000 or RM60,000 from Account 1.
Tengku Zafrul made the announcement in the Dewan Rakyat during the Budget 2021 debate last week that the i-Sinar facility will be expanded to include all who have had their income affected due to the Covid-19 pandemic.
Previously, the facility was only open to members who have lost their jobs, given no-pay leave, or have no other source of income.
The EPF — one of the world’s oldest and largest retirement funds — is now refining the i-Sinar withdrawal facility and is expected to provide further details today.
According to its initial guideline, affected depositors can start applying from mid-December 2020, with the first payout beginning a month after their application is approved. Advances will be made over six months from the first date of credit.
It said eligible members will have access to 10% of their savings in Account 1, subject to always having a minimum balance of RM100.
For those with savings of RM90,000 and below in Account 1, they are allowed access to any amount up to RM9,000. The amount advanced will be staggered over six months with an increased first advance of up to RM4,000.
For those with savings above RM90,000 in Account 1, they have access to up to 10% of their savings, but capped at RM60,000. The amount advanced will be staggered over a six-month period with an increased first advance of up to RM10,000.
Depositors who choose to apply for the i-Sinar facility will be required to replace the full amount advanced, whereby all future contributions will be 100% credited to Account 1 until the amount advanced is replenished.
Thereafter, contributions will revert to 70% to Account 1 and 30% to Account 2.
EPF CEO Tunku Alizakri Raja Muhammad Alias had previously said the EPF would have to liquidate some assets and rebalance its porftolio to make billions of ringgit in funds available to depositors.
Tunku Alizakri did not provide details about the liquidation plan, but said the fund would look at assets that “best suit” its long-term strategy.
The asset sell-off plan had been put in motion since March to ensure that the EPF had sufficient funds early on. The fund, however, needs to be careful of the potential impact it has on the market.
The EPF is the single-largest investor in the local equity market. According to Tengku Zafrul, the EPF has RM960 billion of assets under management at present.
i-Sinar will complement other assistance programmes offered by the government and other EPF reliefs during this pandemic, such as the reduction of employee statutory contribution rate, the i-Lestari withdrawal facility and the Employer Covid-19 Assistance Programme.
The EPF has strongly urged members to first seek financial advice from its Retirement Advisory Services or the Credit Counselling and Debt Management Agency to determine the right amount to be applied under i-Sinar to ensure sustainability during the crisis.
Read our earlier report