BNM governor: Reform retirement savings framework to make it future-ready

KUALA LUMPUR, March 29 — Bank Negara Malaysia (BNM) today suggested that necessary reforms were needed to ensure Malaysia’s retirement savings framework is future-ready.

Its governor, Tan Sri Nor Shamsiah Mohd Yunus, said this would address existing gaps in the current retirement savings framework.

“A low number of EPF members meet the basic savings threshold. There is limited access to social protection for workers in the informal sector and there are gaps in old-age assistance and labour market frictions such as insufficiency of old-age assistance and lack of job opportunity for the old-age groups to re-enter the job market,” she said.

Nor Shamsiah said one of the ways to reform the present system would be by ringfencing retirement funds as this would allow for greater accumulation of savings alongside structural reforms to boost incomes.

“Universal registration into EPF and Socso can identify needs for uncovered segments, and it enables linking of cash assistance with upskilling programmes.

“Lastly, linking old-age assistance to standard of living and hiring incentives for old-age workers,” she said.