EPF retirement withdrawals total RM1.97b in 3Q

KUALA LUMPUR: Retirees withdrew a total of RM1.97 billion from the Employees Provident Fund (EPF) in the third quarter of 2009 (3Q09), a 20% rise from RM1.64 billion in the previous corresponding quarter.

In a statement yesterday, EPF said a total of RM1.41 billion (2Q09: RM1.81 billion) was withdrawn as lump sum age 55 withdrawal, representing an increase of 14.22% from a year earlier. Total applications approved under this category rose to 32,446 (2Q09: 39,901) from 29,054 previously.

The remaining RM557.05 million (2Q09: RM705.89 million) was withdrawn under flexible age 55 withdrawal which rose by 38% from RM403.51 million in 3Q08.

"Increasing member interest in flexible age 55 withdrawals underscores members' confidence in the EPF in earning dividends for their savings," said EPF chief executive officer Tan Sri Azlan Zainol.

"Nonetheless, 72% of retirement withdrawals still consist of lump sum withdrawals. We hope to see this amount decrease over time as more members become increasingly aware that lump sum withdrawal will likely lead to income inadequacy during retirement."

Azlan said the trend of stretching the retirement ringgit was also reflected in the applications for members' investment withdrawal that continued upwards, albeit marginally, by 3.58% compared with 3Q08.

In 3Q09, a total of 111,418 applications (2Q09: 114,268) were approved with withdrawals amounting to RM872.89 million (2Q09: RM906.8 million) compared with 107,564 approved applications and RM808.53 million withdrawn a year earlier.

EPF said members, however, exercised greater prudence and care in making withdrawals for housing as shown in a significant annual decrease in 3Q09, due to the adverse economic conditions.

It said with many purchasers adopting a "wait and see" attitude, approved applications for housing withdrawals in 3Q09 fell 20.18% to 86,664 from 108,573 in 3Q08 (2Q09: 104,951 applications). The amount withdrawn fell 30.75% to RM1.1 billion from RM1.58 billion a year earlier (2Q09: RM1.32 billion).

As at end-September 2009, EPF membership grew 2.4% to 12.28 million compared with 12.211 million in 2Q09 and 11.99 million in 3Q08. The total number of active members rose to 5.73 million from 5.6 million in 3Q08 (2Q09: 5.72 million). The number of registered employers rose 2.44% from 440,603 in 3Q08 to 451,399 in 3Q09 (2Q09: 447,119).