Deputy Secretary General A Balasubramaniam told Bernama that the majority of workers had no other savings for their old age except for the EPF.

With effect from March last year, workers’ monthly EPF contribution rate was reduced to 8 per cent to help stimulate the economy by giving more spending power to them.

“Although the reduction has given the workers some immediate extra cash, they will lose out in the long run as this will affect their old age savings in the fund.

“However, with the improving economy, it is no longer necessary to maintain the reduced rate,” Balasubramaniam said.

Last week, Finance Ministry Secretary-General Dr Mohd Irwan Serigar Abdullah disclosed that the country’s economy grew by 4.2 per cent in the first quarter of this year.

“Even foreign direct investment (FDI) is improving, indicating a robust economy,” he added.

At present there are 14.5 million EFP contributors, but only 6.79 million are active.

-BERNAMA