EPF found that 90% of Malaysians will reach the retirement age of 60 and at least 50% will live till 80 years old. However, figures show only 3% of Malaysians would have enough in their EPF account to retire. – LOW BOON TAT/The Star
Employees Provident Fund helps to ensure social security and comfortable retirement for all Malaysians
DEEP structural issues surrounding the prevailing social protection framework in the country were unearthed since the Covid-19 pandemic hit.
Critical issues include fragmented and overlapping programmes, gaps in overall coverage, and inadequacy of programmes to comprehensively address socioeconomic vulnerabilities and fiscal challenges.
As part of its many efforts to contain and resolve these pressing matters, the Employees Provident Fund (EPF) is organising the 11th International Social Wellbeing Conference (ISWC 2023) on July 5 and 6 at the Mandarin Oriental Hotel, Kuala Lumpur – themed Changing the Game: Building the World We Want – to continue creating awareness on social protection through the exchange of ideas and perspectives, and boost policy implementation, as well as inspire accountability among industry stakeholders.
EPF chief strategy officer Nurhisham Hussein says ISWC brings together a lineup of speakers, policy makers, non-government organisations, as well as those involved in the social protective sphere.
“The event focuses on thought leadership – influencing people and creating conditions where reform can happen.
“We bring together governments and people from around the world to listen, talk, discuss, network and expose ourselves to what other countries have done, what we can do to improve, exchange best practices, and to keep up to date with the latest trends as well as think about social protection,” says the expert on social protection.
EPF chief strategy officer Nurhisham Hussein says withdrawing from your EPF account now means you are taking from your future self.
Noting that ISWC is an important element in improving the system, Nurhisham says that having open dialogues can enable fruitful discussions which can continuously create reform towards a better system for all Malaysians.
He says past ISWCs have been successful in shifting the thinking around social protection in Malaysia.
“We have begun to address poverty as a multidimensional phenomenon instead of just looking at it in terms of dollars and cents.
“Poverty is not just about the lack of money. It is the lack of access, opportunities, education and more,” says Nurhisham.
Jointly organised by the Finance Ministry, the Implementation and Coordination Unit under Prime Minister’s Office (PMO), and the International Social Security Association (ISSA), ISWC 2023 emphasises on the need to transform existing systems and approaches to create a more inclusive and equitable world through innovative strategies, collective action, and forward-thinking policies which can address the challenges and gaps in social protection.
The two-day hybrid conference will showcase keynotes and panel sessions with over 20 local and international speakers who will be sharing their insights on topics surrounding the issues of inequality – which include income inequality, education and social inequality, disparities in healthcare, gender-responsive policies and the role of social protection in reducing inequality.
Prime Minister Datuk Seri Anwar Ibrahim is expected to officiate the event.
Reform difficult but on track
About 40% of the workforce does not fall under EPF coverage, according to the fund’s data.
Noting that this alarming figure works as a great motivational force for the fund to expand its coverage, Nurhisham reveals that EPF is reviewing its entire mandate.
“We are looking to extend it to gig workers, over a million contract workers, agriculture workers, architects who operate as enterprises, accountants and lawyers who are categorised as partnerships, consultant doctors and general physicians.
“Even housewives, students and the rest deserve protection – whether it is retirement, accident, or invalidity – as they are all Malaysians.”
He notes that countries such as South Korea and Singapore have successfully implemented full coverage, and that Malaysia should start too.
“South Korea has reached 70% coverage, Singapore at 63%. It took two decades for these countries which have good systems and political will to implement full coverage.
“Malaysia is only at the start of our journey and it will probably take us 30 years to get there, but we have to start somewhere.”
ISWC 2023 organised by the EPF emphasises the need to transform existing systems and approaches to create a more inclusive and equitable world through innovative strategies, collective action and forward-thinking policies to address challenges and gaps in social protection. – IZZRAFIQ ALIAS/The Star
Nurhisham highlights that EPF is also expanding its focus beyond monetary protection upon retirement – towards all the things that people value.
“People would want to continue being part of society even after retiring, which includes integral elements such as spiritual development, education, family and more.
“EPF has started looking at old age protection, including the right to shelter, the right to mobility, among others – not just in terms of income security.
“Those different aspects of wellbeing is a more holistic view of retirement. It has come to a stage where it’s beyond dollars and cents, but rather aspects of what makes life worth living.”
Given that Malaysia is one of the fastest ageing nations in the world and ranked second in Asia after South Korea, Nurhisham says EPF is working to have systems in place which can accommodate the population of retirees in the years to come.
“EPF is committed to creating a holistic retirement for them. We have to ensure that there are institutions and policies in place as it takes time to build up capacity.
“We have to take on a whole of society approach and we can’t solely rely on the government because resources may deplete.”
Planning for your future self
Life is unpredictable. One will not know what will happen tomorrow or even later in the day.
To err on the side of caution, it is advisable to think ahead and plan for the future.
According to EPF’s figures, 90% of Malaysians will reach the retirement age of 60 and a significant portion of that figure – at least 50% – will live a ripe long life of 80 years.
However, Nurhisham says only 3% of Malaysians would have enough (in their EPF account) to retire comfortably.
“The minimum pension of RM240,000 is only enough to cover only groceries. EPF calculated that a single elderly person needs a minimum of RM2,000 a month for the bare minimum to live in the Klang Valley. If we live 20 years after retirement, we would need at least RM600,000.”
Nurhisham points out that the bulk of Malaysia’s population is currently made up of 30- to 40-year-olds, who will likely retire by 2050.
“Different age groups have different sets of priorities. The 30 to 40 age group places importance on money due to current priorities such as starting a family, buying a house, transportation, among others.
“They, unfortunately, do not include saving for retirement as a priority, and often forget about it.”
He adds that some even make early withdrawals which depletes their accounts greatly.
“Withdrawing from your EPF account means you are taking from your future self,” he says.
To address this issue, EPF has been enhancing its presence among the people to remind them the importance of saving for themselves.
“We have become more vocal, to have constant presence among the people. We redeployed some of our branch staff into mobile teams to go on the ground and provided them the tools to make it easier for people to save more with us.
“We have also made it much easier to engage with EPF via our mobile applications through which voluntary contributions of up to RM100,000 a year can be made.”
In the meantime, EPF is looking into implementing other modes of payment and working with banks to help people save.
“In the future, Malaysians can make payment using e-wallets and cards, and we are also working to accept cash contributions for the citizens in East Malaysia,” says Nurhisham.
