KUCHING, March 8: The Sarawak Business Federation (SBF) urged its members to consider saving in the Employees Provident Fund (EPF) voluntary contribution scheme.
In a statement issued today, the federation said that this is because the EPF has started posting stronger performance amid the economic rebound.
“By law, EPF is required to provide a guaranteed dividend of at least 2.5 per cent a year. However, EPF has consistently exceeded its mandate and delivered significantly higher rates throughout the years.
“With EPF paying good dividends, it makes good sense for our members to consider saving in the voluntary contribution scheme,” said the federation’s deputy president and EPF board member Datuk Philip Ting.
EPF announced its headline dividend of 6.1 per cent for its conventional fund and 5.65 per cent for the Syariah fund in early March. This latest dividend rate was the highest in the past two years.
He added that members should consider the voluntary contribution scheme and focus on rebuilding their savings.
“For this kind of yield, we want our members to consider depositing spare money, as it makes a sound option for retirement. In addition, this ensures that they have enough savings in EPF to afford retirement as Covid-related withdrawals have massively impacted contributors’ savings.
“SBF expresses concern over the issue of inadequate savings for retirement as pandemic-related withdrawals under i-Sinar, i-Lestary and i-Citra has resulted in low levels of savings for those below age 55.
“It is estimated that almost half of EPF members aged 54 and above would have less than RM50,000 upon retirement. Therefore, it is important that this issue is addressed urgently,” he said.
Under the EPF voluntary contribution scheme, a member must contribute at least RM5 a month or RM60 a year, and contributions can be made at any time, according to an individual’s financial capability.
“Sarawakians working overseas, the self-employed, business owners, commission agents, and even pensioners may pay any amount up to RM60,000 a year. In addition, those not mandated by law to contribute to EPF should also take advantage of this scheme.
“Meanwhile EPF is exploring many more benefits for its members which will be announced soon such as insurance scheme, financial planning and consultation.” — DayakDaily
