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KUCHING, July 13: Sarawak United People’s Party (SUPP) Stakan branch chairman Dato Sim Kiang Chiok opines that contributions to the proposed Account 3 in the Employees Provident Fund (EPF) should be made optional for members.
Sim was commenting on EPF’s intention of establishing a new account, Account 3, for members, particularly informal workers, who will be able to withdraw any amount at any time.
“In my opinion, setting up Account 3 for EPF contributors is a good additional feature to our pension fund that can be withdrawn at any time in addition to our mandatory contributions in Account 1 and Account 2.
“(However), it should be optional and members are allowed to contribute on a voluntary basis, rather than compulsory,” he said.
He went on to say that the interest rates must be higher than any commercial bank rates so that members can enjoy a better return for Account 3 to work.
Sim remarked that the Account 3 could serve as an alternative to commercial bank savings accounts to provide working Malaysians with an opportunity to save at higher interest rates.
“The interest rates should be paid on a daily rather than yearly basis,” he added.
Meanwhile, regarding EPF’s proposed mandatory monthly withdrawal for new members born after 2010, Sim stated that it is similar to a pension fund.
“It is like turning our EPF into a pension fund when compared to now where it is a retirement fund with the option to withdraw all the funds, periodically, or monthly after reaching age 55 and 60,” he claimed.
He further explained that implementing mandatory monthly withdrawals at the pension age has its advantages, as it ensures that members do not deplete their funds too quickly.
However, he mentioned that the drawback is the inability to withdraw all the funds for debt settlement or investment in other ventures.
“A lump sum withdrawal might cause the member to run out of money fast if the retirement fund is spent unwisely and he or she might have to return to the workforce due to insufficient retirement fund,” Sim remarked. — DayakDaily
