EPF Withdrawals To Clear PTPTN Loans Spike

EPF Withdrawals To Clear PTPTN Loans Spike

Employees Provident Fund (EPF) has seen a huge increase of 152.42% in “Education” withdrawals in 2016 to settle their National Higher Education Fund Corporation (PTPTN) loans.

The EPF’s 2016 Annual Report recorded a whopping RM1.4 billion in 86,725 transactions withdrawals for “Education” last year, while in 2015 the transaction was recorded at RM578.18mil in 65,787 transactions.

The spike in withdrawals was mainly attributed to the settlement of education debts, said EPF chief executive officer Datuk Shahril Ridza Ridzuan, adding that he was watching this trend closely.

“A lot of the increase primarily has been for the settlement of education debts. It is because of PTPTN’s big push to get their borrowers to pay up,” Shahril said.

“Previously, the education segment was a smaller part of our withdrawals but it is now a larger amount,” he said. However, he added that the bulk of withdrawals are still for retirement at 55 years.

“That’s because PTPTN started blacklisting people so that they would settle their debts,” said Shahril.

When asked if it is encouraged for members to withdraw their retirement fund to pay off their student loan, he answered, “This is a different issue but from a national standpoint, if you don’t repay your student loans, it is going to be very hard for a new generation of students to borrow money.

“From a social policy point of view, it is important to collect outstanding PTPTN debts so this can be self-sustaining.”

The report also showed that withdrawals have increased overall since 2014, rising by some 30% to RM44 billion in 2015 and by another 5.8% to RM46.57 billion last year.

However, Shahril cautioned that members should try their best to keep their savings in the EPF to benefit from the principle of compounding returns.

Other than withdrawing to pay off their education loan like PTPTN and for their retirement, EPF members can also withdraw their EPF savings to buy their first home and when they leave the country.


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