Allow EPF Dividend Withdrawals

Moving away from politics and blame game for a while with a suggestion to help Rakyat.


Recent decision by the government to allow EPF contributors to reduce their mandatory monthly EPF contribution to 8% has received mixed reaction from analyst and contributors.


It is said that the governments intention is to encourage spending which will contribute towards expansion of the economy in these hard times. The government must have known that if we Malaysians have extra cash in hand, we are definitely likely to spend rather than save.

While the move may help those in the middle and low income groups, it must be acknowledged that these are the same group who end up with less savings when they retire, as suggested by many financial planners. Lowered mandatory EPF deduction for 2 full years can be quite substantial and affect future savings and dividends, if any.

What I would like to propose is that EPF should keep the mandatory 11% reduction intact and allow contributor to withdraw yearly dividends which is usually announced early in the year.

With many private sector companies unlikely to give bonusses or increments this and next year, withdrawal of dividends would definitely come in handy at the start of the year where many families spend more than usual for all kinds of expenses such as school fees, clothes for school schildren, yearly property assessments, quit rents, insurance etc.


Let's say a contributor has a balance of RM 10,000 in his EPF savings and dividend announced by EPF is flat 5%, he would be entitled to one off RM 500.00 withdrawal.

This measure, if implemented on voluntary basis would definitely help those in need without affecting EPF contributor's mandatory monthly deductions and existing savings.