ALOR STAR: The Consumer Association of Kedah (Cake) welcomes the Employees Provident Fund (EPF) Akaun Fleksibel but cautions that it is a short-term move to ease the financial burden of contributors.

Its president Yusrizal Yusoff said the Akaun Fleksibel, commonly known as Account 3, would enable EPF contributors to use their saving to pressing needs without having to resort to a personal loan.

However, Yusrizal said Account 3 was a short-term instrument to ease contributors' financial needs, and the government should look into ways to replenish the depleting level of retirement savings.

"Before Hari Raya, I carried out a survey and found that most Malaysian households, not just the B40 and the M40 groups, are living in deficit with mounting debts," he said.

He said there was increasing demand for legal or illegal moneylending as many Malaysians were living on debts to survive.

"While the Account 3 is a helpful short-term solution, the government should really find ways to help contributors in the B40 and M40 groups increase their savings.

"Even if the Account 3 provides an instrument for contributors to have some a saving, only a handful of them will likely do that because majority of the contributors are not earning enough to save a portion of their monthly income.

"We don't really see the relevance of Account 3 to act as a saving fund for majority of the contributors because they don't even have money left after deducting their monthly expenses," he said.

Yusrizal said the level of EPF savings among the B40 group was "extremely worrying."

"There were several EPF withdrawals during the Covid-19 pandemic .... (which) depleted savings significantly.

"The government will need to find ways to help the group of contributors to replenish or increase their retirement savings.

"Our utmost concern is that many of the EPF contributors will not have not sufficient saving to support their life after retirement," he said.

EPF yesterday said that beginning May 11, monthly contributions would be distributed into three accounts instead of two previously.

Seventy-five per cent of contributions will go into Akaun Persaraan (previously called Account 1), 15 per cent into Akaun Sejahtera (previously called Account 2) and 10 per cent into Akaun Fleksible.

Between May 11 and Aug 31, EPF members may make a one-time transfer of part of their savings in Account 2 to Account 3.

https://www.nst.com.my/news/nation/2024/04/1043010/epf-account-3-topping-depleting-savings-more-pressing-says-consumer