i-Lestari Account 2 Withdrawal Scheme enables you to withdraw RM500 monthly from your EPF

Prime Minister Tan Sri Muhyiddin Yassin announced that Malaysians below the age of 55 are now allowed to withdraw RM500 monthly from their Employees Provident Fund (EPF) Account 2 savings for 12 months. This aims to alleviate Malaysians’ financial burdens during the Covid-19 pandemic. The scheme is expected to benefit more than 12 million EPF contributors with a total amount of RM40bil withdrawn.

Additionally, RM500mil will be allocated to the Health Ministry and RM130mil to state governments to help fight the disease.

Decision to allow RM500 EPF withdrawals will yield unfavourable consequences?

withdraw RM500 monthly from your EPF (Mobhouse productions)
J Solomon of MTUC (Image source: theedgemarkets)

However, the announcement garnered criticisms from the Malaysian Trades Union Congress (MTUC). According to MTUC secretary-general J Solomon, this initiative will result in the loss of annual and compounded dividends as well as deplete employees’ long-term savings.

Solomon urges for reconsideration,

“The government should have the moral courage to dig into its reserves to pump in this money directly into the pockets of workers without having to compromise their old-age savings.”

He says that the government should use reserve funds to provide interest-free loans of at least RM5,000 for each EPF contributor during this time of need. Contributors should then be allowed to start repaying the loans through salary deductions once the situation returns to normal.

withdraw RM500 monthly from your EPF (Mobhouse productions)
Employees Provident Fund (Image source: themalaysianreserve)

Many of us are facing the financial impact of the Covid-19 outbreak. So if you really have no other choice but to withdraw RM500 monthly from your EPF, you can apply for the i-Lestari Account 2 Withdrawal Scheme beginning April 1. Additionally, you can expect your savings to be deposited into your bank account from May 1 onwards.

Feel free to send an e-mail to ilestari@epf.gov.my if you have any queries or visit KWSP for more info.