When the Malaysian government announced a lockdown to control COVID in early 2020, Roob’s factory, which produces fishing lures, began haemorrhaging money.

Roob was determined not to lay off any of his 22 employees but as the lockdowns continued into 2021, he began to lose hope that the situation would improve.

“My business suffered losses due to decisions made by the previous administration and I was thinking things would turn around,” Roob, the owner of Drave Fishing Sdn Bhd in Klang, a city about 30km (18 miles) west of Kuala Lumpur, told Al Jazeera.

With his business at stake, Roob made the decision to withdraw 15,000 Malaysian ringgit ($3,400) from his Employees Provident Fund (EPF) account, where he had saved nearly 200,000 ringgit ($45,157) over the years for his retirement.

The savings, withdrawn in two instalments in 2020 and 2021, allowed Roob to cover the mounting costs of keeping his business running, including paying his employees.

“It did come to a point where I was running really low on cash flow so the EPF withdrawals came as a blessing in disguise,” Roob said, whose business is slowly recovering from the losses it suffered during the pandemic.

“I have no regrets at all because it was the right thing to do.”

Roob’s case is far from unique.

Some 145 billion ringgit ($33bn) was pulled from EPF accounts by Malaysians during the pandemic.

In 2020, the administration of then-Prime Minister Muhyiddin Yassin made it easier for Malaysians facing financial constraints to dip into their retirement savings.

While Malaysians have long been allowed to make partial withdrawals from their compulsory retirement plans for certain reasons, including to cover education, health and housing costs, the changes provided the option of withdrawing funds to mitigate the hardship caused by the country’s lockdowns.

The first of four special withdrawal schemes, introduced in April 2020, allowed contributors to withdraw 500 ringgit ($113) a month for a period of 12 months. The most recent round, announced in March last year, capped withdrawals at 10,000 ringgit ($2,253).

“We really needed the funds at the time,” Selvendra Rao, a physiotherapist who runs the Wellborne Physio Centre in Petaling Jaya with his wife Prithylasmi, told Al Jazeera.

“We had to use our EPF funds because we were running out of savings at that point,” Selvendra, who withdrew the maximum 10,000 ringgit from the couple’s combined savings of 130,000 ringgit ($29,319), said they had no regrets because it was the only way to save their business.

While the withdrawals provided a lifeline to many Malaysians, they exacerbated a looming pension crisis in the Southeast Asian country, where low wages, high levels of debt and growing life expectancies leave millions of workers ill-prepared for retirement.

Last month, Malaysia’s central bank warned that the average Malaysian is at risk of running out of retirement savings 19 years before their death.

As of December, 51 percent of the 6.7 million EPF contributors under the age of 55 had savings of less than 10,000 ringgit, up from 4.7 million contributors with that amount of savings in April 2020, according to EPF data.

In response to a parliamentary question earlier this month, Prime Minister Anwar Ibrahim warned that 81 percent of EPF contributors will not have enough savings to live above the poverty line after their retirement.

In a written reply to Al Jazeera, the EPF, which operates under the purview of the Ministry of Finance, said the uptick in withdrawals would have long-term implications for contributors’ retirement.

“Based on Malaysians’ life expectancy, 10,000 ringgit only allows members to earn a retirement income of less than 42 ringgit ($9.50) per month for a period of 20 years,” a spokesperson said.

The spokesperson said, however, that the 145 billion ringgit withdrawn during the pandemic represented only a small fraction of the fund’s total assets.

“Nonetheless, the amount is still under control as it only represents 15 per cent of the total assets under management, which currently stands at 1 trillion ringgit [$225bn],” the spokesperson said.

Nungsari A Radhi, an economist and former MP, said allowing the withdrawal of EPF savings was a mistake that will leave pensioners facing a retirement crisis.

“After some 145 billion ringgit was withdrawn from the pension fund, what is on the horizon are retirees who will live in poverty if all they have is their EPF and this does not even include larger numbers of those without any pension funds,” he told Al Jazeera.

Despite the savings shortfall, some Malaysian politicians, including opposition leader Hamzah Zainuddin, have called on the government to allow targeted withdrawals for those who need them.

Hamzah cited the case of contributors who have defaulted on their housing loans despite having significant savings in their retirement accounts.

Anwar, who is also the finance minister, has said he has no plans to continue the pandemic-era withdrawal schemes, a stance backed by the EPF. But Anwar’s administration has floated plans to allow the use of EPF savings as collateral for emergency loans.

The EPF spokesperson said the body was aware of the government’s proposal and would “carefully consider all relevant factors to ensure its smooth implementation”.

Nungsari, the economist, expressed scepticism about allowing the use of retirement savings for loan collateral, warning it may only exacerbate the troubled pension fund’s woes.

“Whatever it is, we will be facing a huge crisis ahead – the elderly population living in poverty,” he said.

For Selvendran and his wife, the option of using EPF savings as loan collateral would be a welcome development. After nine years in business, the couple has found that securing a loan from their bank can be difficult.

“I would definitely take it up but again, it would be purely for business,” he said.