KUALA LUMPUR (Aug 2): The Employees' Provident Fund (EPF) is calling for the government to increase its contribution in the 1Malaysia Retirement Savings Scheme (Skim Simpanan Persaraan 1Malaysia, SSP1M) to cater to the increasing growth of labour in the 'gig economy'.

"We want the government to increase that amount (of contribution) to incentivise people to subscribe to the scheme," EPF chairman Tan Sri Samsudin Osman told reporters in a press briefing for the International Social Security Conference 2017 here today.  

SSP1M is a government initiative to ensure self-employed individuals without fixed monthly income have a savings plan upon reaching retirement age.

Currently, the government is contributing 10% with a maximum amount of RM120 per year to members of the scheme, on top of the scheme's yearly dividend.   

According to Samsudin, the growth of the gig economy, also known as the informal sector, has increased by 31% this year, outpacing the workforce in traditional jobs. 

"As the gig economy is rising at a faster pace than the traditional job market, individuals who seize work opportunities in the gig economy are often, inadvertently, left out from social security coverage," Samsudin said.  

EPF Deputy Chief Executive Officer (Strategy Division) Tunku Alizakri Raja Muhammad Alias said since there is no formal protection system for the self-employed who falls under the gig economy, there is a growing concern for a savings plan for when they retire. 

"EPF sees the exponential growth in the gig economy. That's why we need to make sure that people understand the importance of retirement and how to prepare as early as possible. So financial literacy is a key sector," Alizakri said.  

"A lot of people are making a lot of money in the gig economy for now, but the thing is if they don't understand that they need to also save for the future, then they will be in trouble when retirement comes," he added.  

Consequently, Alizakri mentioned EPF is taking on a larger advisory role to its members. He noted EPF has taken the first step by introducing its retirement advisory service since last year, claiming Malaysia is the second country in the world to introduce this service. 

"Our employees are now certified to be able to give advice to our members on how to prepare for their retirement in the future. 

"So the sort of products and services that you'll see EPF introduce in the next few years will be catered towards more of the changing lifestyle," Alizakri added.