KUALA LUMPUR: According to the Finance Ministry, the problem of inadequate savings in the Employees Provident Fund (EPF) has reached a critical level. This is evident from the fact that 6.3 million members under the age of 55, or 48%, have less than RM10,000 in their accounts as of Sept 30.
The Ministry’s written reply, posted on the Parliament website on Nov 20, indicates a rise from 4.7 million members (37%) in April 2020, before the Covid-19-related special withdrawals were introduced.
The Ministry also highlighted that members with savings below RM10,000 are expected to have a retirement income of less than RM42 per month for a period of 20 years. It pointed out that the additional withdrawals from Account 1 have a long-term effect, resulting in a significant reduction in retirement savings among EPF members.
This response was provided in light of a question raised by Zulkifli Ismail (Perikatan Nasional-Jasin) regarding the government’s initiative to address the issue of insufficient retirement savings among the people, compounded by the large informal sector in Malaysia and a higher dependency ratio.
The Ministry emphasized that the issue is being taken seriously, especially considering the rapidly ageing population in the country. This demographic shift is expected to have a significant impact on the nation and people in terms of the economy, productivity, social welfare, quality of life, and health.
In response to the problem, the government announced in Budget 2024 an increase in the matching grant limit under the i-Saraan programme from RM300 to RM500 per year, subject to a maximum limit of RM5,000 for each eligible individual throughout their lifetime. – Bernama
