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Determinants of Special EPF Withdrawals among Malaysian Employees Amidst the COVID-19 Pandemic

Author

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  • Claudia Jiton

    (Industrial Relations Programme, Faculty of Social Sciences and Humanities, Universiti Malaysia Sabah)

  • Dzurizah Ibrahim

    (Industrial Relations Programme, Faculty of Social Sciences and Humanities, Universiti Malaysia Sabah)

Abstract

In response to the COVID-19 pandemic, Malaysia has implemented various financial relief measures to support those adversely affected by the crisis. These measures primarily target individuals who have experienced job loss or a reduction in wage due to the pandemic. One of the options available to individuals was the premature withdrawal from their social security account, specifically the Employees Provident Fund (EPF) account, through various programs such as i-Lestari, i-Sinar, and in 2021, i-Citra, and also “Pengeluaran Khas,†in 2022, even though such withdrawals are said to be potentially risky. Conducting a qualitative method by using an in-depth interview, this paper determines the factors associated with employees’ EPF withdrawals during the COVID-19 pandemic in Malaysia. Therefore, this paper identifies the factors of withdrawals and the relationship between characteristics such as financial hardship, precautionary demand for cash, uncertainty over finances, and immediate financial obligations and uses it as a guideline for building a framework to enhance the current social security system in Malaysia and manage future unforeseen crises. Based on the findings, this study proposes a range of policies based on the identified factors of early EPF withdrawals.

Suggested Citation

  • Claudia Jiton & Dzurizah Ibrahim, 2024. "Determinants of Special EPF Withdrawals among Malaysian Employees Amidst the COVID-19 Pandemic," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(4), pages 1861-1871, April.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:4:p:1861-1871
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    References listed on IDEAS

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    1. Gustman, Alan L. & Steinmeier, Thomas L., 2015. "Effects of social security policies on benefit claiming, retirement and saving," Journal of Public Economics, Elsevier, vol. 129(C), pages 51-62.
    2. Sciortino, John J. & Huston, John H. & Spencer, Roger W., 1987. "Perceived risk and the precautionary demand for money," Journal of Economic Psychology, Elsevier, vol. 8(3), pages 339-346, September.
    3. Franco Modigliani, 2005. "The Collected Papers of Franco Modigliani, Volume 6," MIT Press Books, The MIT Press, edition 1, volume 6, number 0262134543, April.
    4. Muhammed Abdul Khalid, 2021. "COVID-19:  Malaysia Experience and Key Lessons," Asian Economic Papers, MIT Press, vol. 20(2), pages 73-95, Summer.
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