Abstract
While the establishment of provident fund is mainly to ensure retirees to be financially secured in old age, pre-retirement withdrawals are commonly permitted for various purposes. These withdrawals had been identified as one of the main causes for low accumulated savings. Using a longitudinal administrative dataset, the paper explored the withdrawal patterns among members of the Malaysian Employees Provident Fund and how much savings would be increased should there be no withdrawal allowed. Based on transaction records from 2002 until 2012, it was found that withdrawal varies by type of withdrawal and age. Preventing withdrawal would increase RM18, 384.10 in median savings. Data indicate that the amount of increment increases with age, however, more than 80% of the members would have an increase in savings of not more than RM50, 000. While the amount of increment in savings is found to be low, other forms of withdrawal should not be permitted if the EPF savings is to ensure financial security in retirement.
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