SHAH ALAM: The low wage structure in Malaysia is one of the reasons why there is inadequacy of retirement savings, says the Employees Provident Fund (EPF).
Its chief executive officer Datuk Seri Amir Hamzah Azizan also said EPF would support the initiative to push it closer towards the living wage of RM2,700.
"Helping our members build adequate funds is important but we also need to look at the reasons that have affected the ability of the members to grow their EPF savings.
"I think one of Malaysia's big issues is the low wage structure," he said.
To illustrate his point, Amir Hamzah said 44% of active EPF members in formal sectors earned below RM2,000, with 81% of active EPF members in the formal sectors earning RM5,000 or less.
"This is too low and we will support the initiative to push towards a living wage," he said.
He said the previous increase in minimum wage from RM1,200 had helped in making improvements.
He said there was a need to increase the base for savings and the issue of low wage structure must be addressed as the minimum wage of RM1,500 was significantly below the living wage and minimum expenditure required.
"Our data shows that there is still a big gap towards the living wage," he said.
He said based on EPF’s Belanjawanku findings, a single individual living in the Klang Valley who was a public transport user without a car would need a bare minimum of RM1,930 as their monthly expenditure. As for those who own a car, they would need RM2,600.
This he said was higher than the minimum wage rate of RM1,500 and lower than the living wage rate of RM2,700.
"We need to push for living wage to address the inadequacy," he said.
"I think this is the biggest push that needs to happen in the country," he added.