Tuesday July 17, 2012
Full EPF withdrawal at 60
By P. ARUNA
PETALING JAYA: The age for full withdrawal from the Employees Provident Fund (EPF) by contributors will be raised to 60 years and partial withdrawal to 55.
The planned amendment to the Employees Provident Fund (EPF) Act 1991 follows the passing of the Minimum Retirement Age Bill 2012 in Parliament last month which extends the minimum retirement age for private sector employees from 55 to 60.
“It is a consequential move. Once we raise the minimum retirement age, we have to raise the age of EPF withdrawal as well,” said Deputy Finance Minister Datuk Donald Lim Siang Chai.
He said the decision had been made and it was only a matter of time before the amendment would come into effect.
Currently, contributors can make partial EPF withdrawal at 50 and full withdrawal of their savings upon retirement at 55.
However, Lim said they were looking at providing a transition period for contributors who have already planned to withdraw their contributions within the next few years.
“We have not finalised the transition period, but it will be between three and five years,” he said adding that during this period, contributors who reached the age of 55 could still make full withdrawals.
EPF contributors had expressed concern about whether the age for full EPF withdrawal would be raised.
Many wanted the option of withdrawing their savings at 55 even if the retirement age was raised to 60, saying that they required their savings for pressing needs such as their children's education and elderly parents' medication while some felt that they deserved the flexibility of choosing when they could withdraw their savings.
MTUC secretary-general Abdul Halim Mansor said they were in the dark about the planned amendment.
“We have not been involved in any discussion regarding raising the age of EPF withdrawal or any other amendment to the Act,” he said.
However, he agreed with the proposal, saying EPF contributions were meant to be used after retirement.
“Our intention is for workers to have sufficient funds after retiring.”
He said the Government should however consider allowing contributors flexibility to withdraw their savings at 55 for specific reasons.
Fomca chief executive officer Datuk Paul Selvaraj agreed, saying workers should not withdraw their savings until retirement.
“However, if they decide to retire earlier, they should be given the option to withdraw their savings before 60,” he said.