KUALA LUMPUR – Young working adults who have made withdrawals from their Employees Provident Fund (EPF) Account 3 said high living costs and low wages have forced them to do so.
Those interviewed said they earn an average monthly salary of around RM2,000 and have turned to Account 3 or the Flexible Account to settle daily expenses such as bills and to pay for unforeseen circumstances.
Without Account 3, retail worker Arina Zainal, 29, said she would use up half her monthly salary to pay her bills.
“Almost all my income goes to covering my rent and daily expenses. The costs of utilities and internet keep going up, and it’s a little hard for me to keep up.
“The price of food – whether I cook at home or dine out – continues to rise, further stretching my budget.
“This is the price I have to pay for living in the city. However, if I go back to my hometown, there are not many job opportunities,” she told Scoop when met at the EPF branch on Jalan Raja Laut where she was applying to open her Flexible Account.
Aril Samsudin, 25, who works for a trading company, said his monthly salary of RM1,500 – the current national minimum wage – is not enough for him to have any emergency savings.
“On average, I have to spend around RM300 per month just for petrol. I have to commute a lot for work, so I am also worried about my car breaking down suddenly.
“Every few months, I have to service my car and the maintenance cost is not cheap. The money I withdraw from Account 3 is meant to prepare for such needs.”
Aril said that given his EPF balance, he can withdraw RM2,000 through Account 3 and expressed that he hopes the sum can last him for six months.
Yee Mei Kei, 20, who works in a mobile phone company, said she started the Account 3 to prepare for emergencies.
“As a single person, I have to be ready for any emergency whether it is sudden expenses or health issues.
“Even though you can take out the money whenever you want, it still takes a few days for the money to go into your bank account. So I’ve only withdrawn half of the amount from Account 3, keeping the other half there for the future.”
Amiyuni Limi, 24, said with her starting pay as a fresh graduate, it is hard to juggle car loan payments with student loans and utility bills.
“The payment for my car is already RM700, and another few hundred is for my student loan. I still need to pay for food and other things.
“Tapping into my EPF savings is crucial for staying on top of these financial obligations without incurring late fees or penalties.
“Plus, the cost of utilities is steadily increasing. Electricity bills are especially high due to the need for air conditioning in the hot climate right now,” she said.
The Flexible Account or Account 3 scheme, launched on May 11 for EPF members’ short-term needs, allows even young adults like Yee and Amiyuni who have worked only a short while to withdraw their EPF funds, as transfer to the new account and fund withdrawals will depend on how much a member has in their Account 2.
If they have more than RM1,000 and less than RM3,000 in Account 2, only RM1,000 will be transferred to the flexible account and nothing to Account 1 which is for retirement.
If they have RM1,000 and below in Account 2, the entire balance will be transferred to Account 3, while nothing will be transferred to Account 1.
Their incoming contributions to EPF will be apportioned to Account 1 (75%), Account 2 (15%) and Account 3 (10%). – May 21, 2024