Anwar Rejects More EPF Special Withdrawals

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Prime Minister Datuk Seri Anwar Ibrahim has rejected calls to make Employees Provident Fund (EPF) withdrawals easier, warning that allowing more access to retirement savings could hurt Malaysians' long-term financial security

Speaking in the Dewan Negara, Anwar said the government must balance Malaysians' immediate financial needs with their ability to sustain themselves after retirement.

"I do not intend to support measures to make (EPF) withdrawals easier because they would affect contributors' long-term interests," he said.

His remarks come amid continued public debate over whether Malaysians should be given greater access to their EPF savings to cope with rising living costs and financial pressures, reported the New Straits Times.

However, Anwar said the government must consider the consequences of allowing more withdrawals, particularly when many contributors may not have enough savings to support themselves after reaching retirement age.

Under the current EPF scheme, which utilises a three-account structure, contributors can already access part of their savings through different accounts.

The Flexible Account allows members to withdraw 10% of their savings without conditions, while the Sejahtera Account contains another 15% that can be used for approved purposes such as education, healthcare, housing, and performing the hajj.

Anwar said the government's priority is to ensure Malaysians do not sacrifice their future financial security for immediate relief.

Separately, Anwar said Retirement Fund Incorporated (KWAP)'s investment earnings remain insufficient to cover the government's annual pension obligations

He said KWAP recorded RM12.9 billion in investment earnings, but the amount is still far below the nearly RM45 billion required each year to fund pension payments.

Anwar said the sustainability of pension financing had been identified as a major challenge more than two decades ago, including during his earlier tenure as finance minister.

"Although the earnings are substantial and reach tens of billions of ringgit, they are still unable to cover the long-term cost of pension requirements," he said.

He added that resolving the issue would require political determination while balancing the interests of civil servants with the government's financial capacity.

He also said that KWAP should not stop investing in startups despite the eFishery controversy

Addressing KWAP's RM163.4 million investment in Indonesian aquaculture startup eFishery, which became embroiled in an alleged fraud controversy, Anwar said the incident should not cause institutional investors to avoid investing in startups entirely.

According to Anwar, requiring companies to have lengthy track records before receiving investment would prevent new businesses from getting the capital needed to grow.

He noted that KWAP had also invested in Malaysian companies and startups, including LaPasar and ZUS Coffee.

Anwar said investment professionals should strengthen their assessment processes and avoid relying solely on the reputation of international investors or auditors as a guarantee of success.

While investment losses cannot be completely avoided, he stressed that any evidence of corruption, abuse or misconduct must not be tolerated.