The RM 10k withdrawal from our EPF accounts has boosted the economy. My friends who are in the retail industry, both online and offline channels, experienced a surge in sales. I believe a lot of the withdrawal is spent on shopping instead of spending it on daily necessities.

Over the decades, there are always rumors about EPF bankruptcy. When the 1MDB issue is in the limelight, the members are worried about their money being used to save the company and lead to EPF's bankruptcy. When the EPF office in Petaling Jaya caught fire, the members are worried about their EPF savings being burnt to ashes. Whenever I received questions from my friends and family regarding the financial status of EPF, I will always give them this answer: EPF is safe, our population is still growing and more and more people will be entering the workforce.

However, things had changed. Our Total Fertility Rate (the total number of children that would be born to each woman) has fallen to 1.94, which is lower than the replacement rate of 2.1. (On average, women give birth to 2.1 children and these children survive to the age of 15, any given woman will have replaced herself and her partner upon death. A TFR of 2.1 is known as the replacement rate.)

In fact, the statement of a growing workforce is going to change as well. Here's the population pyramid of Malaysia. The population of kids is now lesser than the number of working adults.

In short, EPF is going to deal with its own “crisis” once the demographic dividend disappears after the middle of the next decade when the monthly withdrawals are going to be larger than the money going into the EPF due to our aging society. Once the outflow is larger than the inflow, EPF has to sell off its assets from the capital market and this could be huge selling pressure on all of Malaysia's financial assets.

We cannot avoid the day but we should not be accelerating that process.