24 Sep - 3 min read
The Employees Provident Fund (EPF) has highlighted the significant drop in the percentage of members who meet the basic savings threshold due to the Covid-19 pandemic. This has led the provident fund to express concern over the retirement security of the Malaysian public.
“While we are confident that the government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, we are 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 account,” said the chief executive officer of the EPF, Datuk Seri Amir Hamzah Azizan in a statement.
Datuk Seri Amir Hamzah also shared that the pandemic had led to a significant drop in the percentage of members meeting the basic savings threshold from 36% to 27%, due to the Covid-19 related withdrawals to supplement their income during the crisis. Since the start of the pandemic, the government had introduced several initiatives that allowed eligible Malaysians to withdraw from their EPF funds to weather through current challenges, including i-Sinar and i-Citra.
Meanwhile, the basic savings threshold is an estimated amount that is considered by the EPF to be sufficient to support a member’s basic needs for 20 years upon retirement (from 55 to 75 years old). The amount is currently set at RM240,000.
Aside from that, Datuk Seri Amir Hamzah also commented on the considerable hike in the number of gig workers within the country. He said that although gig work has helped Malaysians survive, many of these workers are also falling back on their retirement security due to irregular and unstable income. Additionally, gig workers face disadvantages such as the lack 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,” said Datuk Seri Amir Hamzah, who added that the EPF’s key strategy moving forward is to get gig workers and those in the informal sector to make EPF contributions for their own retirement. One of them includes the recent MoU with Grab to encourage its driver and delivery partners to contribute to their EPF savings via the i-Saraan programme and the EPF self-contribution programme.
That said, Datuk Seri Amir Hamzah also emphasised that a coordinated solution for the longer term is necessary to provide better social protection for the public. “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,” he said.
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