EPF: Low Wage Structure One Of Several Reasons For Inadequate Retirement Savings
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(Image: The Star/Azhar Mahfof)

Chief executive officer of the Employees Provident Fund (EPF), Datuk Seri Amir Hamzah Azizan has pinpointed Malaysia’s low wage structure as one of several reasons for the inadequate retirement savings among Malaysians.

“Helping our members build adequate funds is important, but we also need to look at the reasons that have affected the ability of the members to grow their EPF savings. I think one of Malaysia’s big issues is the low wage structure,” said Datuk Seri Amir Hamzah, adding that more initiatives are needed to push it closer to the living wage of RM2,700.

Briefly, living wage is defined as an income level that allows individuals or families to maintain a normal standard of living, including affording adequate shelter, food, and other necessities.

(Image: The Malaysian Reserve/Razak Ghazali

To illustrate his point, Datuk Seri Amir Hamzah shared some data from the EPF, saying that 81% of active EPF members in the formal sector are currently earning a monthly salary of RM5,000 or less – which is too low. Worse, 44% of them earn below RM2,000.

EPF’s CEO further highlighted that based on EPF’s Belanjawanku findings, it was found that a single individual living in the Klang Valley who uses public transport (without a car) will need at least RM1,930 to cover their monthly expenditure. Car owners, meanwhile, will need a minimum of RM2,600.

“We need to push for living wage to address the inadequacy. I think this is the biggest push that needs to happen in the country,” said Datuk Seri Amir Hamzah. He also acknowledged that the previous revision of the minimum wage from RM1,200 to RM1,500 has slightly improved the situation, but reminded that RM1,500 was still significantly below the living wage required. As such, more needs to be done to increase the base of savings, he stressed.

(Source: The Star)

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