EPF expresses concern over retirement security of Malaysians as pandemic empties savings

EPF expresses concern over retirement security of Malaysians as pandemic empties savings
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KUALA LUMPUR (Sept 24): The Employees Provident Fund (EPF) has expressed concern over the retirement security of Malaysians as the Covid-19 pandemic led to a significant drop in the percentage of members meeting the basic savings threshold.

The EPF said in a statement today that while the fund is confident that the government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, it is very concerned about the retirement security of the people, especially with 46% of EPF members below the age of 55 having less than RM10,000 in their accounts.

EPF chief executive officer (CEO) Datuk Seri Amir Hamzah Azizan said the pandemic led to a significant drop in the percentage of members meeting the basic savings threshold (of RM240,000 at age 55) from 36% to 27% — pursuant to the Covid-19-related withdrawals to supplement their income during the crisis.

He added that the pandemic also triggered a dramatic rise in the number of gig workers in the country, and while that helped workers to survive, many of these workers are falling back on their retirement security due to irregular and unstable income.

Additionally, he said, they are facing vulnerabilities in terms of employees’ benefits and social protection coverage.

“There will be far-reaching repercussions not only for their future well-being, but also for the government, which will have to carry that financial burden,” he said.

Amir Hamzah also said that the key element of the retirement fund’s strategy going forward is to get gig workers, as well as those in the informal sectors, into the EPF scheme, so they can start to save as early as possible and plan for their retirement.

He said a coordinated solution for the longer term is needed to ensure better social protection for all Malaysians.

“As we recover from the crisis, the EPF’s focus is to help its members restore and rebuild their retirement savings to ensure that they are able to secure a dignified retirement.

“We will remain focused on our strategic asset allocation and continue to be cognisant of risk profiles of markets as they develop so that we are able to shift along the way. While we are doing that, our fundamental purpose of providing returns and protection for our members’ future well-being will continue to be preserved,” he said.

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Jenny Ng