KUALA LUMPUR: Employees Provident Fund of Malaysia (EPF) chief executive officer Datuk Seri Amir Hamzah Azizan today said that as of May 2023 only 18 per cent of total members meet basic savings by age, which will enable them to have at least RM1,000 a month over a 20-year retirement age.
The benchmark EPF uses to determine Basic Savings achievement by retirement age of 55 years old is RM240,000. This translates to RM1,000 per month over a 20-year retirement period.
As of May 2023, Amir said only 30 per cent of its active formal members meet basic savings by age, while only 18 per cent of it total members meet the same threshold.
EPF has 15.8 million members.
"Indeed, the inadequacy of retirement savings is worrying, as it highlights deep-rooted contributing factors. To compound matters is the blend of other multiple factors such as a low wage structure, misalignment between full withdrawal age and retirement age, inconsistent contributions and under-employment, as well as a low rate of financial literacy," Amir said in his opening remarks at the International Social Wellbeing Conference 2023 (ISWC 2023) today"
"As the EPF's membership now reaching a large network of 15.8 million members, we strive to implement long-term strategies to create a positive impact and foster wellbeing," said Amir Hamzah.
Among others, he said the EPF is now focused on the extension of EPF coverage and to enhance members' retirement savings adequacy.
With only 56 per cent of Malaysia's 16.7 million labour force having some form of formal social protection coverage, the EPF has deployed mobile units to reach out to seven million people in the informal sector and self-employed, who could become an EPF member.
Besides that, the EPF he said is also exploring various other approaches to enhance the national pensions and retirement landscape. This includes a basic income drawdown option to strengthen its decumulation offerings to provide members with an additional source of retirement income.
"The establishment of Pillar 1 of the International Labour Organisation's Multi-Layer Income Framework is also another area that the EPF is actively studying through the introduction of a contributory national pension," he added.