The retirement savings balance of Employees Provident Fund (EPF/KWSP) members who have reached 55 years old should not be used as the sole indicator of sufficient retirement funds, said Second Finance Minister Datuk Seri Amir Hamzah Azizan.
He explained that members reaching 55 can choose to withdraw their retirement savings partially, periodically, or in full. Therefore, measuring adequacy based on savings at this age is not ideal. Instead, the basic savings benchmark by age during the accumulation phase is a more suitable indicator of whether contributors are on track before they become eligible to withdraw their retirement funds.
“Out of 7.44 million active formal members aged 18 to 55, 38.3% or 2.85 million had achieved the basic savings target by age as of 31 July, compared with only 30.4% in December 2022, after the impact of COVID-19-related withdrawals,” he said.
He added that this increase among active formal members better reflects the real situation, as they are part of the formal workforce actively contributing to their retirement savings.
Amir Hamzah was responding to a question from Senator Mohd Hasbie Muda regarding the number of KWSP contributors aged over 55 this year who have sufficient retirement savings.
Among active formal EPF members aged 18 to 55, 1.38 million Bumiputera members have achieved the basic savings benchmark, followed by 1.22 million Chinese members, 214,000 Indian members, and 38,000 from other ethnic groups.
He noted that one of the main factors affecting low EPF savings—especially among Bumiputera members—was the series of special withdrawals during the COVID-19 health and economic crisis. “Although these withdrawals helped ease financial burdens at the time, they impacted retirement savings, which are still in the process of being rebuilt,” he said.
Moving forward, efforts will focus on rebuilding retirement savings and ensuring members enjoy sustainable retirement incomes.
