81% of EPF members with less than RM1,000 in savings are Bumiputera

by FAYYADH JAAFAR / pic source: EPF FB

BUMIPUTERA accounts for 81% of the Employees Provident Fund (EPF) members with less than RM1,000 in savings.

According to Minister of Finance Tengku Datuk Seri Zafrul Tengku Abdul Aziz, a total of 6.62 million EPF members, or 52% of the total 12.78 million EPF members aged under 55, have less than RM10,000 in savings as of June 30, 2022.

4.99 million, or 75%, of the 6.62 million EPF members are Bumiputera.

He further added that the majority of the Bumiputera members are concentrated among those who have a low level of EPF savings compared to other races.

“At the same time, there are a total of 3.2 million members under the age of 55 who are at a very critical savings level of less than RM1,000, of which 2.58 million members, or 81%, are Bumiputera members,” the minister stated.

“In comparison, 8.22 million Bumiputera members make up 64% of the total 12.78 million EPF members under the age of 55.

“This shows that most Bumiputera members are concentrated among those who have a low level of EPF savings compared to other races.”

He said that Covid-19-related programmes are expected to affect members’ savings by RM155 billion.

“This includes RM145 billion from the four withdrawal programmes and almost RM10 billion from the statutory contribution rate reduction programme of employee share.

“Overall, these Covid-19-related programmes are expected to affect members’ savings by RM155 billion,” he said.

Tengku Zafrul said that the government has taken several steps to help members increase and rebuild their retirement savings, including providing various channels to make it easier for members to contribute to the EPF.

Members who are employed and have an employer may contribute more than the employee share statutory contribution rate of 11% at any time. In addition, they can also contribute themselves at any time.

“Members who are self-employed, have no fixed income or are outside the labour force, such as students and housewives under the age of 60, can also choose to contribute voluntarily at any time according to their ability under the i-Saraan Programme, up to RM60,000 per year.

“As an incentive for this group to save through i-Saraan, the government contributes 15% of the total contribution, up to RM250 per year.

“For the head of household or the wife of the former who is under 55-year-old and registered under the eKasih database, they can also contribute voluntarily under the Kasih Suri Keluarga Malaysia programme (previously known as the i-Suri Programme) that was introduced to encourage women from low-income households to save for their old age.”

Under this programme, members who contribute at least RM5 per month or RM60 per year are eligible to receive an incentive from the government of RM40 per month or RM480 per year into their EPF account.

“The EPF also stresses how important it is to be aware of and know about financial planning and retirement,” the minister said in closing.

 

Ed’s note: The article has been updated to reflect better accuracy