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.
