PETALING JAYA: Despite lower contributions to Akaun Sejahtera following the Employees Provident Fund’s (EPF) latest initiative, analysts are of the opinion that it won’t have a significant impact on the property sector.
Economists said this was because Akaun Sejahtera, formerly known as Account 2, only saw a decrease of 5% in contributions, and it will not have an adverse effect on a person’s plan to purchase a home.
Socio-Economic Research Centre (SERC) executive director Lee Heng Guei said that prospecon middle-income earners making about RM5,000 a month. tive homebuyers would not rely entirely on Account 2 savings to buy a home.
“I’m sure there are other savings in addition to Akaun Sejahtera that are going to supplement an individual’s plans to buy a house.
“I think it won’t have a significant impact on the property sector because, as a buyer, you have already made plans on the down payment amount,” he said. However, he said the reduced contributions to Akaun Sejahtera may have a more adverse effect
“Their income isn’t high, and they depend a lot on the EPF.
“They may have to save for a few more years (for their house purchase plans),” Lee said. He said it is entirely up to an individual whether or not to optin for an initial amount to their Akaun Fleksibel, also known as Account 3.
“The onus is on you. Account 3 will always be there, and if you decide to have 10% there, then let it be.
Otherwise, you can zerorise Account 3,” he said. Lee also stressed on the importance of having sound financial literacy and discipline if an individual decides to opt in for Account 3.
“For those who want to opt in for Account 3, make sure you know how to manage it because you don’t want to come to a point where you will have no extra account to resort to in a crisis,.
“Think carefully, because you have from May until August to decide,” he said.
Malaysian Institute of Economic Research (MIER) head of research and senior research fellow Dr Shankaran Nambiar said while Akaun Fleksibel may affect funds available for house purchases, education and healthcare, it may be necessary in the event of an emergency.
“While it may be necessary to cover emergencies arising from floods and unexpected events, given the lack of a system that covers such events and the low savings rate for certain segments of the population, there has to be a wayout,” he said.
“I think, taking the desperate situation people get into, the EPF has found it necessary to make this arrangement; reality gets the better of what’s prudent,” he said.
On another note, Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Akaun Fleksibel may not have much of an impact on retirement savings.
“Akaun Persaraan (Account 1) was previously at 70%, and now the ratio has gone up to 75%. I suppose that should help mitigate the impact of Akaun Fleksibel’s (AF) withdrawal,” he said.
“If they need it immediately, perhaps an opt-in for initial loading will be an ideal choice,” he said.
“Otherwise, they can just let the Akaun Fleksibel accumulate and make the necessary withdrawals as they deem fit. And the amount in Akaun Sejahtera will be the same as in previous years if the members do not opt in,” he added.
For research fellow Dr Muhammad Abdul Khalid, the new EPF initiative serves as a “middle ground” in the government’s measures to balance public pressure on rising financial challenges and the need to strengthen an individual’s retirement funds.
“With this approach, you retain the flexibility to access your cash (via Account 3) as needed while simultaneously improving your retirement savings,” said Muhammad of the Institute of Malaysia and International Studies at Universiti Kebangsaan Malaysia.
However, Muhammad said this initiative would have a limited effect on assisting the vulnerable because not all of such workers possess an EPF account.
“Only half of non-pensionable workers are enrolled in EPF, leaving a large portion of the Malaysian workforce without adequate social protection. This means that nearly half of Malaysian workers won’t benefit from the initiative,” he said.Muhammad said that even if a low-income wage earner does have an EPF account, their savings are way too small.
“For instance, among the B40 that are EPF members, half of them have savings of less than RM250 in Account 2, and for the bottom 10%, half of them have less than RM10.
“They do not have enough to transfer to Account 3 for immediate withdrawal,” he said. Therefore, Muhammad said it is important for Putrajaya to come up with a more effective approach.
The EPF has launched Account 3, with members given a one-time opt-in option to transfer funds from their Account 2 to the newly launched “Akaun Fleksibel”.
The funds will transfer into Account 3 within 24 hours if a member opts in.
