MTUC Sarawak wants EPF at 60 years

KUCHING: MTUC Sarawak is in favour of extending the EPF retirement withdrawal to 60 years in line with the minimum retirement age of 60 years, for the private sector, passed by Parliament in June 2013. 

The minimum retirement age for the private sector is not mandatory retirement. Mandatory retirement only exists in the public sector and is currently set at 58 years. 

“The (qualified) age for retirement withdrawal must be moved from 55 to 60 years. Otherwise, it defeats the very objective of EPF as savings for retirement and the increase in the retirement age,” said MTUC Sarawak Secretary Andrew Lo. “EPF pays better dividends than, for example, Singapore where the rate is only 2 per cent per annum.” 

He was expressing disagreement with “ill-informed and misplaced comments” like “EPF is my money. I know what to do with it”. MTUC Sarawak was also expressing disappointment that certain quarters, including Ministers, were against extending the EPF Retirement Withdrawal to 60 years. 

Lo advises the retired against depending on their children to take care of them in their old age. “The children can hardly take care of themselves.” 

He pointed out that MTUC had fought long and hard for the implementation of the minimum retirement age of 60 years “so employers cannot force an employee to retire earlier than 60 years”. “For those who need part of their funds earlier and plan to retire earlier than 60 years, the existing 50 years withdrawal scheme can remain, at 50, or extend to 60 years,” said Lo. “This would give the flexibility to contributors and will be the right thing to do.” 

“There can also be a three to five year transition period for those who already planned to retire earlier.” 

In any case, MTUC is against earlier retirements.

“The setting of the retirement age at 60 years is a major step towards a more comfortable retirement. Don’t destroy this dream by insisting on earlier withdrawals,” pleaded Lo. “Everybody wants to get rich before they get old. For the majority of EPF contributors, we get old before we can get rich.” 

The situation is hardly ideal. 

Citing EPF figures, he added that most contributors have an average RM120,000 in their savings at retirement. “This is not sufficient to live on given the life expectancy of 79 years,” warned Lo. “By 2025, 25 per cent of Malaysians will be in the old age group i.e. above 65 years.” 

Who is going to take care of them? 

He lamented that most people who withdraw their EPF, according to studies, spend it within three years. “The money is used to buy diamonds, go for holidays, and pay off debts, children’s education, investments and even children’s weddings.” 

There are those who are greedy, he continued, and invest in get rich quick schemes.