While the newly introduced EPF Account 3 otherwise known as Akaun Fleksibel intends to meet the current needs of the public and assist them to tackle financial challenges, the drawbacks of this initiative cannot be ignored. 

The establishment of Akaun Fleksibel is to aid members address immediate concerns. It is also the government's response to the earlier proposal by the opposition to restart the EPF special withdrawal scheme. This is undoubtedly a 'lifeline' for those in urgent need, enabling people constrained by immediate financial difficulties to utilise their EPF funds in advance to solve cashflow problems, especially in cases of unemployment, illness, and other emergencies.

Earlier, the EPF announced that it would automatically add a third account or Akaun Fleksibel on May 11th, with 10% of the monthly contribution allocated to this Account 3.

Essentially, the government's rollout of Akaun Fleksibel amid the ongoing economic downturn effectively shifts the burden onto individuals to "fend for themselves" using their own savings well before retirement. This approach is seen as lacking long-term consideration for the contributors' welfare and future. Instead, the government should explore avenues to boost people's income and alleviate the cost of living, rather than placing the onus solely on citizens to depend on their EPF retirement savings to navigate economic hardships.

The government is recommended to implement measures like providing financial aid and boosting national economic transformation efforts to raise employee income shares. In the long term, prioritising financial education and structural reforms in the national economy are crucial for improving overall financial well-being and ensuring stable retirements.

The new mandate requires all contributors to have a third account, with no option to opt out. For those who prefer not to have this account, they must personally instruct the EPF to set up a standing order to transfer funds regularly from the third account to the other two.

Acknowledging that some individuals may not wish to withdraw EPF savings or be compelled to open a third account, imposing such restrictions could negatively impact their future retirement fund dividends, making them a disadvantaged group. The EPF should consider members' opinions and needs. Hence, it is proposed that the EPF allows members to decide independently whether to transfer funds from the second account to the third account to protect their financial interests.

Datuk Ir Lawrence Low
MCA Vice President
MCA Economic & SMEs Affairs Committee Chairman

30 April 2024

-MCA Online-