Yearly EPF withdrawals to settle housing loans
The Star 11/4/2006 BY FLORENCE A.SAMY

PETALING JAYA: Employees Provident Fund (EPF) contributors can now withdraw their Account II savings yearly to reduce or settle their housing loans.

They can also now make withdrawals to fund tertiary education starting at diploma level for themselves and their children under the Education Withdrawal scheme.

Prior to the changes, members were only allowed to withdraw their Account II savings once every three years to reduce or settle their housing loans.

Under the Education Withdrawal, they were only previously allowed to withdraw savings to pay for diploma courses for themselves and for degree courses and above for their children.

The housing withdrawals, according to a statement yesterday, can be made annually from the last date of withdrawal, with a minimum amount of RM500.

“In addition, members are now given the flexibility to help their spouses reduce or settle their housing loans even if the member is not a joint owner, a requirement prior to this new amendment to the EPF’s procedure,” the statement said.

When helping spouses reduce or settle loans, several conditions have to be complied with. The spouse must be the purchaser and borrower of the housing loan, and the property is mortgaged to a bank.

Proof of marriage is required.

EPF senior public relations manager Nik Affendi Jaafar said the changes, approved by the Finance Ministry, were part of the EPF’s initiative to implement more flexibility in withdrawals.

“We are constantly studying the viability of our withdrawals and benefits to meet the changing and diverse needs of our 5.2 million active members.”

“We are confident that these changes will be welcomed by members,” he added.

Meanwhile, MTUC president Syed Shahir Syed Mohamud, when contacted, said members must practise discretion when using such facilities so as to not jeopardise their old-age savings.

“The life expectancy for a male and female is the early and mid 70s, respectively. When a person retires at 55, he still has 15 to 20 years more and I’m concerned about how he can take care of himself if his savings is used up,” said Syed Shahir who is an EPF board member.

Cuepacs president Datuk Nordin Abdul Hamid, who is also an EPF board member, concurred with Syed Shahir and said that contributors had to be smart and careful, and that their savings would not be affected.