Johari warns against using EPF savings to support loans FMTNews
The government recently announced that EPF members would be allowed to use the savings in their Account 2 to support applications for bank loans.
He said it would be more straightforward to allow people to withdraw their savings from the retirement fund. This is an alternative solution to calls from the opposition and various groups for the government to permit another round of EPF withdrawals. “The net amount from a borrowing of RM70,000 after deducting interest payments is RM35,000. In such a case, it would make more sense for a contributor to simply withdraw RM35,000 directly from his Account 2. He wouldn’t have to pay a sen in interest.”
The Titiwangsa MP said the previous administration’s move to allow blanket withdrawals of EPF savings during the pandemic has had serious consequences. Johari explained that a sudden rush of withdrawals by EPF members would severely disrupt the retirement fund’s investments which would affect its future returns.
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