KUALA LUMPUR: Nearly 30 per cent of Employees Provident Fund (EPF) members have withdrawn their retirement savings in Account 1 when the COVID-19 pandemic hit the country since March last year.

Its Chief Executive Officer, Tunku Alizakri Alias, informed that this is despite the success of the Employees Provident Fund (EPF) in giving a relatively high dividend to its members despite facing various challenges in 2020.

"We find that many members' savings have decreased, we believe about 30 per cent of them have withdrawn almost all of their retirement money in Account 1. They only leave RM100 in the account as a condition.

"We expect 60 per cent of the members will use the money from Account 2. This account is to make it easier for members to buy houses, pay medical and education bills as well as improve their skills.

"The EPF is quite worried about this, we will continue to do more activities as well as awareness campaigns on the importance of savings for old age," he said in the EPF Financial Report for 2020 on Saturday.

Meanwhile, the EPF also informed that a total of RM18.1 billion in savings had been withdrawn by 5.16 million members through the i-Lestari Account 2 Withdrawal Scheme launched earlier.

Apart from that, the EPF also allows members to reduce their compulsory contributions from 11 per cent to 7 per cent effective April 2020 until December 2020.

The EPF today announced a 5.20 per cent dividend for Conventional savings for 2020 while 4.90 per cent for Shariah savings.