World Bank data shows Malaysians not saving enough for pension, three-quarters will have less than RM1,050 monthly benefit at age 54
KUALA LUMPUR, Nov 24 — Only 60.8 per cent of working Malaysians are actively contributing their monthly income to the Employees Provident Fund (EPF), according to data from the World Bank in its country report released today.
The savings for their retirement, especially from those in the lower income bracket, is considered low even when compared to their peers globally, the report added.
“At 60.8 per cent, participation in contributory retirement savings institutions is low, especially when compared to an aspirational peer group of high-income countries.”
“Coverage is especially low among lower-income households, with less than a fifth of working-age B20 (income group) being active EPF contributors,” the international financial group said in its report.
According to the World Bank, the low savings is due to intermittent contribution by employees and the low age threshold set for withdrawals at just 54 years old.
Its data showed that almost three-quarters workers at age of 54 have balances under RM250,000 in their retirement savings account.
“Translated into an indexed annuity, almost three-quarters of workers will have a monthly benefit of less than RM1,050, only slightly more than the poverty line income (PLI) of RM980 before its revision,” the World Bank report highlighted.
It added that since most senior Malaysians will receive reduced monthly income from their EPF savings or none at all, they will have to rely on relatives or social assistance to avoid falling into poverty.
The report titled “A Silver Lining: Productive and Inclusive Ageing for Malaysia” launched on Facebook was officiated by Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed.
He said it is crucial to create a market that allows a regulatory environment for the provision of private elderly care.
He also encouraged strategic public funding towards communities and homes based on elderly care, saying it will become one of the most important sectors to Malaysia’s economic growth.
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