06/08/2025

WEDNESDAY | AUG 6, 2025

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Public debate heats up over pension-style EPF payments

Mixed reactions to

monthly payouts

PETALING JAYA: The plan to revamp Employees Provident Fund (EPF) to provide monthly pension-style payouts has sparked lively debate among Malaysians, with both retirees and active contributors voicing a mix of support and concern. Retired banker R. Selvasingam, 67, is firmly against the proposed shift to fixed monthly disbursements. “I totally disagree with this idea. When I retired, I opted for a partial lump sum withdrawal which allowed me to purchase a property and settle key financial commitments. “At the same time, I left a portion of my savings in the EPF to be withdrawn gradually each year. This gave me both flexibility and long-term financial security.” He urged the government to recognise the diverse financial realities of retirees and avoid enforcing a rigid, one-size-fits-all system. “In my case, the lump sum helped fund my children’s education, pay their college fees and make solid, future focused investments. “What’s needed is a balanced approach that gives contributors the freedom to decide how to manage their hard-earned savings.” Joseph Fernando, 69, a retired senior editor, welcomed the proposed monthly EPF payout model and praised the government’s initiative. “I agree with the scheme. It’s a good initiative and I’m proud of the government for taking this step.” He said while he had previously withdrawn a lump sum to buy his house, he still has savings in his EPF account. “I used part of my EPF money to purchase my home, but I believe having a steady monthly income will help retirees manage their finances better in the long run.” EPF contributor Nur Nafisah Hamdan supports the proposed monthly payout, saying it could offer better protection and encourage smarter financial habits. “With monthly payouts, retirees are less likely to fall victim to scams. When someone suddenly receives a large sum of money, it can make them a target, especially if scammers get hold of their financial details,” said the 26-year-old finance executive. She said a structured monthly income could also prevent impulsive spending and help individuals stay on track. “As long as the monthly amount is enough to cover basic expenses, it should be manageable. But the government should still allow lump sum withdrawals for emergencies such as medical treatments or family crises.” Nur Nafisah said she trusts EPF to manage her retirement funds wisely, especially with the assurance of annual dividends on the balance. “I think this approach could even motivate people to save more during their working years. I’d say this system might cover around 50% of my financial needs during retirement, and that’s already a big help.” – By Qirana Nabilla Mohd Rashidi

immediate, large expenditure. “Without careful design, this reform risks deepening inequality among contributors,” she said, calling for safeguards such as opt-in flexibility, healthcare subsidies and the inclusion of informal workers in the retirement framework. Universiti Malaysia Kelantan cost-of-living researcher Datuk Dr Nik Maheran Nik Muhammad said the monthly payout model may significantly shift retirees’ spending patterns, from lump sum purchases to basic, recurring expenses. She said this could limit their ability to invest in physical assets or financially support dependents. “Many retirees, especially among the B40 group, rely on EPF withdrawals for private or alternative medical treatment. Without access to a lump sum, they may be forced to depend solely on overcrowded public healthcare facilities.” To ensure the system is inclusive, she proposed a hybrid withdrawal model along with healthcare support schemes, digital literacy training for rural contributors and strategic partnerships between EPF and insurance providers to develop tailored annuity-based solutions.

Universiti Mara economist Dr Mohamad Idham Md Razak said a shift to monthly EPF payouts could offer retirees a more stable income stream and reduce the risk of exhausting savings too soon, especially with inflation on the rise. He said the move would, however, require more sophisticated investment strategies from EPF to sustain long-term disbursements. “A hybrid model should be considered with part of the savings made available upfront and the rest paid out monthly. This would meet both urgent and ongoing needs.” He said contributors in rural or lower-income groups may face disproportionate challenges due to limited savings. He proposed targeted support measures such as top-up contributions for smaller accounts and the expansion of financial advisory services in underserved areas. Universiti Kebangsaan Malaysia financial policy researcher Assoc Prof Dr Noor Azuan Hashim said monthly payouts may not be sufficient for retirees with low EPF balances, particularly when faced with emergencies requiring Teknologi

o Contributors must retain freedom to choose between lump sum withdrawals and monthly disbursements, says MCA

Ű BY QIRANA NABILLA MOHD RASHIDI AND FAIZ RUZMAN newsdesk@thesundaily.com

especially in the face of rising living costs and longer life expectancy, it should not be imposed unilaterally. “Many retirees need lump sum access to settle housing loans, pay for major medical treatments or support family obligations. Denying this flexibility could cause unnecessary hardship,” she said in a statement. Chan said MCA urges the government and EPF to focus on boosting financial literacy so that contributors can make informed retirement choices. “Through outreach programmes, workshops and digital tools, contributors can better understand and plan their withdrawals. “Retirement is a personal journey. Financial planning should reflect that. MCA supports reforms to enhance retirement security but not at the expense of personal agency and flexibility.”

PETALING JAYA: Public debate is heating up over the government’s proposal to restructure the Employees Provident Fund (EPF) withdrawal mechanism under the 13th Malaysia Plan (13MP), with economists and political figures voicing concerns over its potential impact on retirees’ financial freedom and long-term wellbeing. On Monday, the MCA called for a balanced approach to the proposal, stressing that contributors must retain the freedom to choose between lump sum withdrawals and monthly payouts. MCA information chief Chan Quin Er said while the move towards pension-style payments aims to enhance retirees’ financial security,

Malaysia did not bow to all US demands during trade talks: PM KUALA LUMPUR: Malaysia was among the few countries that stood firm in protecting key national policies during trade negotiations with the United States (US), Prime Minister Datuk Seri Anwar Ibrahim told Parliament yesterday.

He said Malaysia rejected several US demands, including challenges to the country’s pro-Bumiputera policy, an affirmative action programme that benefits the majority ethnic Malays and other indigenous communities. “We still managed to secure a 19% tariff rate. Most importantly, we defended the Bumiputera policy, which the US considers discriminatory and contrary to international trade principles,” he said in the Dewan Rakyat. Anwar said while Malaysia maintained its position on non negotiable issues, it took a pragmatic stance on others, particularly those involving trade mechanisms such as import and export regulations. “It’s easy to score symbolic victories at home but the country could suffer, and hundreds of thousands of people would feel the

Anwar stressing a point in the Dewan Rakyat yesterday. – BERNAMAPIC

set up their manufacturing facilities in Malaysia, and highlighted that the purchase agreement with Boeing includes a condition that Boeing must set up some of its aircraft manufacturing operations in Malaysia. – Bernama

On the purchase of Boeing aicraft by the Malaysia Aviation Group, he said it was the group’s decision, and that Boeing is not the only aircraft model being acquired by the airline. “We are also buying from Airbus.” He said Boeing and Airbus have

impact. As prime minister, I have to protect the people’s interests.” He said the government is willing to make concessions where possible, not only with the US but also with other trading partners, including China.

‘Fiscal deficit being reduced in phases’ KUALA LUMPUR: The Madani government is gradually reducing the fiscal deficit in phases to lessen the national debt burden, said Prime Minister Datuk Seri Anwar Ibrahim. He said if the deficit were to be reduced suddenly, there is a risk that it would hinder additional allocations for educational activities, the Sumbangan Tunai Rahmah assistance and health. Anwar said the fiscal deficit was recorded at 5.5% of GDP in 2022. This was reduced to 5% in 2023 and to

2023, RM92.6 billion. In 2024, it will further be decreased to RM76.8 billion,” he said in Dewan Rakyat. He said policies implemented have been viewed positively following a rise in foreign and domestic investor confidence.

4.1% in 2024, Bernama reported. “As long as the deficit is not reduced, the debt amount will increase. That is why, from the debt perspective, I said in 2021 that the new debt amounted to RM100 billion, in 2022, RM99 billion and in