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As of 31 July, 2.85 million of the 7.44 million Employees Provident Fund (EPF) members aged 18 to 55 have met the "basic savings amount", said Finance Minister II Datuk Seri Amir Hamzah Azizan
Speaking in the Dewan Negara today, 8 September, he said the figures, representing 38.3% of all members in that age group, mark an improvement from 30.4% in December 2022, following various COVID-19-related EPF special withdrawals.
Of those who have reached the basic savings threshold, 1.38 million are Malays and Bumiputera, 1.22 million Chinese, 214,000 Indian, and 38,000 from other ethnic groups, Amir Hamzah said during a Q&A session.
He explained that EPF members who have reached age 55 can withdraw their savings partially, periodically, or in a lump sum, making their balances unsuitable for measuring retirement readiness.
The government instead uses the basic savings threshold for members below 55 who have yet to access their funds for retirement purposes.
He added that a key reason for low retirement savings, particularly among Bumiputera members, was the multiple special withdrawals allowed during the COVID-19 pandemic
While these measures provided short-term financial relief, they also drained members' retirement funds that have yet to recover.
According to him, the EPF is working to rebuild contributors' savings after RM145 billion was withdrawn through four COVID-19-related facilities — i-Lestari, i-Sinar, i-Citra, and the special withdrawal facility — with 8.2 million contributors participating.
"Therefore, the focus is now on strengthening retirement savings and ensuring that members enjoy a sustainable retirement income," he said.
He added that the government does not plan to introduce new withdrawals, as the EPF account structure has been revamped into Account 1, Account 2, and Account 3, with Account 3 allowing flexible withdrawals during emergencies.
The EPF is also reviewing a proposal for a monthly pension scheme for new members, expected to be approved in the coming years, which existing contributors may opt into.
Understanding EPF savings benchmarks
The EPF's Belanjawanku 2024/2025 and Retirement Income Adequacy (RIA) Framework defines savings benchmarks in relation to "Adequate Retirement Income".
- Adequate Savings: RM650,000, allowing monthly withdrawals starting at RM2,708 in year one and increasing to RM7,389 by year 20.
- Basic Savings: RM390,000 (60% of Adequate Savings), supporting monthly withdrawals of RM1,625 in year one, rising to RM4,434 by year 20.
- Enhanced Savings: RM1.3 million (2× Adequate Savings), providing monthly withdrawals from RM5,417 in year one to RM14,779 by year 20.
To ease the transition to the new RM390,000 Basic Savings benchmark (up from RM240,000), EPF plans gradual annual increases:
- RM290,000 by 1 January 2026
- RM340,000 by 1 January 2027
- RM390,000 by 1 January 2028
The framework, which kicks off next year, encourages members to plan for monthly withdrawals over 20 years, in line with Malaysia's average life expectancy, to ensure a sustainable retirement income.
