Embrace serious reforms in pension, retirement framework - PM

 

The country needs to embrace serious reforms in its pension and retirement framework to ensure financial security and equity for all Malaysians, said Prime Minister Anwar Ibrahim.

Anwar said a recent survey found that 26.1 percent of respondents aged above 60 will continue to work until their health fails as they face challenges in achieving income security to finance their retirement needs.

The old-age population, he said, is more susceptible to poverty compared to the average Malaysian population, as only 29 percent of Malaysians have a pension or pension-like income during retirement.

“EPF (Employee Provident Fund) data shows that one in four members exhausted their savings within five years after reaching withdrawal age.

“The lump-sum nature of the EPF benefit will result in many Malaysians not being able to maintain a reasonable standard of living during retirement or to manage longevity risks,” he said when officiating the International Social Wellbeing Conference 2024 (ISWC 2024) today.

Also present were Deputy Prime Minister Fadillah Yusof, Finance Minister II Amir Hamzah Azizan and EPF chairperson Ahmad Badri Mohd Zahir.

Anwar who is also the finance minister said there is a need to actively seek reform in the pension framework to ensure that every generation will be able to look forward to growing old with dignity.

“New solutions are needed to make sure no one is left behind and that every layer of society benefits from social protection.

“Expanding EPF coverage in phases so that more of the working-age population will become part of the EPF ecosystem will ensure that more Malaysians can accumulate adequate retirement savings for their old age,” he added.

Aged nation in 23 years

The prime minister pointed out that it is projected to only take 23 years for Malaysia to make the shift from an ageing nation to an aged nation, with 14 percent of the population above the age of 65.

Anwar assured that the government is committed to bettering the lives of older Malaysians and building a more inclusive and just society for all, in line with the Madani concept.

“In this regard, the government plans to strengthen two pillars of social protection… for social assistance, the government will further strengthen related programmes to provide support and a safety net for Malaysians facing financial hardship.

“To spur the labour market, the government will continue to strengthen training initiatives, unemployment assistance and other programmes to get Malaysians into jobs that will raise their standard of living,” he said.

- Bernama