EPF withdrawal reforms: 'Prioritise financial literacy and freedom of choice,' govt told
MCA information chief Chan Quin Er was responding to Prime Minister Datuk Seri Anwar Ibrahim's announcement while tabling the 13th Malaysia Plan (13MP) on July 31.
Under the 13MP, the proposed mechanism seeks to ensure a steady post-retirement income by splitting EPF contributions into two components: one for lump-sum savings and another for monthly pension payouts.
'While the aim of this proposal is to ensure that retirees do not exhaust their savings prematurely and thereby safeguard their long-term financial security, particularly in light of the rising cost of living and increasing life expectancy, such a policy however, if implemented universally, should not be unilaterally imposed on existing contributors and must be approached with caution, particularly if it will be a policy applicable to new contributors,' she warned.
Chan said a mandatory monthly pension mechanism may unintentionally disadvantage contributors who have immediate financial needs upon retirement.
'Many retirees may require access to a lump sum to settle outstanding debts like settling housing loans, pay for significant medical treatments such as organ transplants or cancer treatment, invest in caregiving services or support important life transitions such as relocating or helping their children financially,' she said.
'Denying access to the contributors' full savings without flexibility could place them in financial hardship, despite having contributed diligently throughout their working lives.'
Enhancing financial literacy
Continued Chan, enhancing financial literacy must be a parallel priority as a one-size-fits-all solution does not reflect the diverse financial circumstances and priorities of Malaysian workers.
She said rather than enforcing a rigid withdrawal structure, the EPF and the government should significantly invest in financial education programmes that equip contributors with the knowledge and tools to plan their retirement wisely.
'Through targeted outreach, workshops and digital tools, EPF can help contributors evaluate the pros and cons of different withdrawal options based on their lifestyle, health, obligations, and retirement goals,' she reckoned.
'Empowering individuals with financial knowledge is a more sustainable way to prevent premature depletion of savings than restricting access to them.
'Therefore, MCA strongly urges the government and EPF to preserve contributors' freedom to choose between a lump sum withdrawal, discretionary figure to be arranged with EPF, monthly payments or a combination.'
Describing retirement as a deeply personal journey, Chan said financial planning must reflect that reality, and contributors should be trusted to make informed decisions about their own futures with the support and guidance of comprehensive financial education and not through 'enforced restriction'.
'As RMK13 continues to be developed and refined, MCA reiterates our support for meaningful reforms that strengthen retirement security but not at the expense of personal agency and flexibility,' she added. ‒ Aug 4, 2025
Main image: Reuters/Lim Huey Teng
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
38 minutes ago
- The Star
Tariffs unlikely to shake domestic industries
PETALING JAYA: Domestically-driven sectors and ones that depend mostly on internal demand will likely be able to sustain their earnings despite volatilities of trade and impending tariffs. Areca Capital Sdn Bhd chief executive officer Danny Wong said such sectors including banks, data centre-related companies and those dealing with construction, utilities and even land sales, will fare better. 'These sectors could likely outperform the ones that are affected by external factors like tariffs. 'These may settle down once tariffs are finalised or when news of it becomes stale eventually,' he told StarBiz. In early April, the Trump administration implemented an initial 24% tariff on Malaysian goods, but faced threats of a 25% rate with potential hikes of up to 40%. After intense negotiations, a trade pact was agreed, cutting the effective US tariff on Malaysian goods to 19 % – effective this month. For now, semiconductors that fall under Section 232 and pharmaceuticals remain exempt. Wong said for the technology sector, some companies will be able to pivot quickly in light of any new development coming from tariffs. 'It will solely depend on the sub sector and the companies whether they are chip makers, artificial intelligence, or automotive for example. 'But companies that depend on resources like labour might find it challenging,' he explained. Analysts also believe the aforementioned sectors will be able to counter external headwinds. For instance, Maybank Investment Bank (Maybank IB) Research stated that it expects a more balanced second quarter after a rather underwhelming first quarter of 2025. It noted sectors such as construction, healthcare, property and, more selectively, the oil and gas and utilities sectors will have positive momentum. However, planters may see weaker earnings in the second quarter from lower crude palm oil prices, while others might see an uplift from the currency exchange and disposal gains. Meanwhile, Hong Leong Investment Bank Research (HLIB Research) said in a recent report that despite so many uncertainties, not all is doom and gloom. According to the research house, Malaysia still has many factors that will support overall national competitiveness. 'Exemptions remain in place, reflecting the United States recognition that it cannot afford to alienate Malaysia, given its strategic role in the global supply chain. 'Malaysia accounts for approximately 19.8% of total US semiconductor imports, followed closely by Chinese Taipei at 19% and Vietnam at 10%. 'Malaysia's electrical and electronics exports account for 70% of total exports to the United States,' the report said. Furthermore, Malaysia's trade performance had also improved, driven by resilient export growth, greater market diversification, and a recovery in the tourism sector. In addition to that, the country's extensive network of bilateral free trade agreements and participation in the Regional Comprehensive Economic Partnership alongside trade talks will bring about opportunities for preferential market access, thus positioning Malaysia as a regional trade hub. CIMB Securities looked at the manufacturing sector, and noted that in 2024, Malaysia held the largest share of the rubber glove market. 'We expect some incremental shift in US glove orders to Malaysia, but higher tariffs will still increase US buyers' cost base, which may limit restocking or lead to leaner inventories,' it said. The research house added China and Vietnam will most likely redirect supply to non-US markets at a more competitive average selling price (ASP), further intensifying global pricing pressure. 'We believe the revised US tariff rates for glove-producing countries will prompt Chinese glove makers to shift production to the Asean region, particularly Indonesia, to benefit from lower US tariffs,' CIMB Securities said. It added that it will maintain a 'neutral' stance on the sector on the back of ongoing headwinds, particularly sluggish demand recovery due to cautious buyer purchasing patterns, elevated costs and weak ASPs in an oversupplied market with new incoming capacity, particularly from Indonesia. Maybank IB agreed, stating that even though Malaysia enjoys a lower tariff rate of 19%, the narrow or zero tariff differential against regional peers such as Indonesia, Thailand and Vietnam provides limited competitive advantage for Malaysian glove makers, especially as China glove makers continue to expand capacity in these countries. It noted that these offshore facilities allow China players to bypass US tariffs on China-origin goods, further intensifying competition within South-East Asia and limiting pricing power. 'Our channel checks indicate China production costs overseas range from US$14 to US$15 per 1,000 pieces versus Malaysia's US$15 to US$16 per 1,000 pieces. 'With similar tariffs and higher costs, local glove makers have limited pricing power and could risk losing US market share once the new capacity in these countries comes online by end-2025 to early-2026,' it said. With that, Maybank IB said it will maintain a 'negative' stance on local glovemakers with lower target prices as well. 'We believe upcoming results could be weak, mainly due to the weakening US dollar versus the ringgit,' it noted. It also said cost efficiency will be key in maintaining competitiveness.
New Straits Times
5 hours ago
- New Straits Times
Malaysia to roll out regulatory reforms, other measures following US tariff deal
KUALA LUMPUR: Malaysia will roll out three key follow-up actions — an exporter outreach programme, regulatory reform and a nationwide supply chain mapping initiative — following the recent tariff renegotiation agreement with the United States which reduced tariffs on Malaysian goods from 25 per cent to 19 per cent. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the agreement, effective Aug 1, was achieved after "months of intense but thorough as well as methodical negotiations". "Most importantly, we achieved this without conceding on our red lines in key areas," he said in his keynote address at The Edge Malaysia Centurion Club Awards 2025 here today. Tengku Zafrul said those red lines included foreign equity limits in strategic sectors, legal safeguards in digital companies, halal standards and many other areas. But the key point, he added, is that the negotiation package was a all-of-nation offer, not just the government, but all (Malaysians and Malaysian companies). With the tariff deal in effect, Tengku Zafrul said the government is focusing on three key areas, starting with an outreach programme to support industry players and exporters. "Some of you in this room may be impacted, but again we will engage the whole exporters' ecosystem — not just the multinationals, but all the small and medium enterprises that are supporting the major exporters," he said. Secondly, he said the government aims to accelerate industrial reforms by cutting bureaucracy and reviewing regulations to eliminate overlaps, outdated provisions and irrelevant processes. "Thirdly, we need to strengthen the resilience of our supply chain by fortifying specific industries' role in the global supply chain," he said. Tengku Zafrul said Malaysia is making good progress on a supply chain mapping project, which aims to identify every player involved in the economic activities of key industrial sectors. Meanwhile, he said Malaysia's mid-cap companies — defined as listed companies with a market capitalisation of between RM100 million and RM1 billion — remain critical to the country's growth ambition under the New Industrial Master Plan (NIMP) 2030. "For me and for our ministry, we view this award such as Centurion as one of the private sector's contributions to Malaysia's journey towards becoming a high-income, sustainable and globally competitive nation. "As of March 31, there are 519 such Centurions. And this speaks volumes about the vibrancy of Malaysia's mid-cap sector — a sector that is equally critical to our national economic aspirations," he said.
The Star
5 hours ago
- The Star
Asean News Headlines at 10pm on Tuesday (Aug 5, 2025)
Malaysia * Rising govt debt under control, directed at development, says Anwar * MCMC probes viral video of 'influencers' giving scraps to homeless man * Boeing aircraft deal driven by demand, strategic interest, says Anwar * Use 'Sulawesi Sea' and not 'Ambalat' to refer to contested maritime area, says Tok Mat * Opposition lawmakers' claims show they haven't read 13MP document, says PM * Govt to kick off Budget 2026 consultation session on Aug 7, says Fahmi * CAAM, Boeing team up to improve KLIA air traffic ahead of expected passenger surge * Sex worker caught in the act during Sandakan police raid * Respect process of law in probe of Zara Qairina's death, says Home Minister * Structural reforms continue to underpin Malaysia's resilience, says Bank Negara Governor * Health Ministry to engage food content creators to promote healthy eating, says Dzulkefly * Family wants AG to hold inquest into Zara Qairina's death * Court of appeal dismissed former special needs student's appeal in bullying suit * Defence closes case in Zayn Rayyan neglect trial, verdict on Oct 31 * Govt developing AI guidelines to combat online scam, to be ready early 2026 * Proposals on unexplained wealth, monthly pensions to be studied, says Amir Hamzah * Teacher claims trial to sexual assault of 11-year-old student * Dewan Rakyat lacks clear mechanism for no-confidence vote, says Beluran MP * MCMC questions influencer trio over 'leftovers' video * Decomposing body of elderly woman found in locked Kuala Krai flat Singapore * Tycoon pleads guilty in graft case * Singapore-made bot amble matchmakes strangers virtually - without profile photos * Singapore jails Malaysian over scheme to buy phones worth more than S$45,000 with stolen credit card details * 'She had a whole life ahead of her': Boyfriend mourns Singapore's Yishun fatal crash victim * Elderly man in Singapore charged after he allegedly molested, performed sex act on 'vulnerable' man * CEO of sports car distributor accused of offences including multiple counts of false trading in Singapore Indonesia * Indonesia police detain former eFishery CEO who faked data * Two foreign tourists held over robbery targeting money changers in Bali * 18-month jail sentence for sandals thief sparks corruption debate in Indonesia * Bali trial opens for American man accused of drug distribution * Two Chinese nationals dead in Bali boat accident: authorities Thailand * PM Anwar's four wins as Asean Chair, according to veteran Thai journalist * Thailand's foreign tourist numbers fall 6% as regional competition intensifies * Thaksin's niece files complaint over false claims of being a "Cambodian spy" * Thailand approves US$600mil deal for Swedish fighter jets * Thailand plans $572 million stimulus spending and will compensate border conflict casualties * Thai Cabinet approves 10mil baht compensations for fallen troops, police, 8mil baht for killed civilians * Thailand's monitor lizards tipped as next big 'economic animal' in luxury leather * Bangkok seeks sustainable ceasefire ahead of high-level GBC talks * Ceasefire, terms of reference main topic of Thai-Cambodia talks, says Defence Force chief Philippines * Inaugural patrol bolsters defence * Philippine inflation at near six-year low, paves way for rate cuts * Philippines' Marcos strikes defence deals in India Vietnam * Vietnam issues food safety control procedures for exported fresh durian * Vinh Long province seeks to develop diverse tourism experiences in Vietnam * Vietnam facing worsening African swine fever outbreaks * Unexploded bomb found during flood clean-up in Dien Bien, Vietnam Myanmar * Schools and hospital reopen in Nawnghkio town, over 3,400 students return to classrooms * 2 million stimulant tablets seized in southern Myanmar Cambodia * French woman found dead after disappearing during solo run near Angkor Wat * Opinion - Why the SEA Games must remain untouched by politics Laos * Nine dead, over 58,000 affected by floods in Laos * Lao Provincial party secretary, governor replaced as govt extends reshuffle Brunei * Brunei represented at Asean Ride 2025 in Indonesia * Brunei to enhance inclusivity of public sports facilities * Stronger stakeholder commitment needed towards Brunei's Vision 2035 Aseanplus * Anwar calls for deeper appreciation of Asian history, free from colonial narratives * Thailand and Cambodia should reach common ground in peace talks by Aug 7, says Anwar * Thailand-Cambodia talks an early success towards a full resolution, says PM * Sultan Ibrahim arrives in Russia for maiden state visit * Cricket-India's Gill celebrates first series as captain with dramatic win * QuickCheck: Is there a fake letter bearing the Works Minister's name about gratuity payment ceremony? * Athletics-Bednarek labels Lyles 'unsportsmanlike' after post-200m scuffle * Readying Beijing for more rain * Students rally in Dhaka for a new polity amid turmoil * Travel and funding ban for overseas activists * Torrential rain in Taiwan kills four over past week * Unearthing Hiroshima's forgotten dead * Removal of loudspeakers on border with North * Oil falls as Opec+ proceeds with September output increase * Cambodia-Thailand conflict negotiation, govt debt in focus at Dewan Rakyat today * Australia awards navy frigate contract to Japan's Mitsubishi Heavy * Chinese actress Zhao Lusi accuses agency of wage theft, threats * Ringgit extends gains vs US$ amid rate cut talks * Palestine, Taiwan join Hiroshima ceremony for first time on 80th anniversary * Hong Kong issues highest weather warning, as rains shut schools, courts and hospital wards * Nine Malaysian firms make the cut in Forbes Asia's Best Under A Billion 2025 * Asian markets track Wall St rally on Fed rate cut bets * Beijing lifts rain alert after evacuating over 80,000 * Australia lifts foreign student cap to 295,000 and prioritises South-East Asia * Barges carrying fireworks ablaze in Japan, five flee into sea * China's Baidu to deploy robotaxis on rideshare app Lyft * Thousands join Bangladesh rallies, concerts one year after Hasina's ouster * Jeju to host K-Culture Festival, offers fully-paid trip to three wheelchair-using M'sian BTS fans * Platforms to rein in aggressive discounting * 'KPop Demon Hunters' songwriter Vince to release new single with G-Dragon * Japan sets record high temperatures, worries mount over rice crops * Jailed rapist refuses to quit Australian state parliament * Court orders Caprice to remove defamatory Instagram posts about businessman * Oil edges down as traders weigh Trump's latest India threat * Hong Kong police investigate mangled body found on street * Japan sets record temperature of 41.8 deg C * Thousands join Bangladesh rallies, concerts one year after Hasina's ouster * India deploys rescue teams as flood swamps Himalayan town * Pakistan police arrest 120 workers of ex-PM Imran Khan's party ahead of protest * US reaffirms commitment to strengthen defence, security diplomacy across Asean, says PM Anwar * Ringgit ends higher against US dollar on Fed rate cut hopes * Hong Kong's booming wealth sector to lead hiring and office expansion, HKMA says * South-East Asia's rising golf star Jeeno Thitikul of Thailand is now the No. 1 in the Rolex Women's World Golf Ranking * Google offers to blur sensitive sites on its map amid Seoul's security concerns * China announces phased implementation of free preschool education * Malaysia's 'it' couple, Bella Astillah and Syed Saddiq, are also the star-twosome after being awarded the 'hottest duo' title at Melodi Awards * Actress Bella Astillah had to present award to ex-husband's rumoured fling * China twins score 666 points in crucial exam, astonish many with coincidence * Trump says 'getting very close' on extending China trade truce * Trump says he will 'substantially' raise tariffs on India over Russian oil purchases * Motor racing-Cadillac will add value as 11th F1 team, says McLaren's Brown * Malaysia in final running for Unesco Executive Board seat * India hits back at Trump's threat over Russian oil purchases * Australia regulator says YouTube, others 'turning a blind eye' to child abuse material
