Thursday, June 9, 2022

An Ageing Population And The Need For A Retirement Safety Net.

 An Ageing Population And The Need For A Retirement Safety Net.

When workers were entiched to withdraw their  Employees' Provident Fund (EPF) savings to sustain themselves during the Covid19 pandemic, it resulted in only about 3% of them having adequate  savings to afford to retire. 

Thus, the indisputable fact is, that, our working population are stranded with inadequate savings, or none whatsoever, post retirement. Given the fact that our population demography is fast reaching an old age soceity, and coupled with the fact that they don't have sufficient post retirement savings, our nation may well be heading towards a future that will witness growing poverty. 

Without sustainable post retirement savings our "warga emas" would either be compelled to continue to work or become dependent on the goodwill of soceity for survival unless the government initiates an appropriate social safety system to address the situation.

We, in the MTUC, believe that it is possible to implement a comprehensive post retirement safety net if the government is minded to:-

1. Merge the EPF and SOCSO entities so as to consolidate their resources to introduce a retirement safety scheme. As we understand the EPF investment assets are about a trillion ringgit. And SOCSO's asset size is in the billions. With such massive financial assets, and through prudent return on investment, we are convinced that a post retirement safety system is possible.

2. Setting aside say 1% of taxes collected.

With the consolidation of EPF and SOCSO and with an annual allocation of a portion of taxes collected to the said entity, we believe that a retirement safety scheme may well be possible.

3. Enhance EPF Contributions.

Enhancing existing statutory EPF contributions will increase savings with our proposed consolidated EPF, SOCSO organisation which, in turn would enable the sustainability of our suggested old age support scheme.

4. Move Towards A Living Wage.

Whilst progressive improvements, to the minimum wage, is welcomed it does not meet the threshhold living wage module as expounded by Bank Negara Malaysia. According to Bank Negara an individual needs a living wage of RM2700.00 to sustain him or herself. By moving towards a living wage it would, consequentially, translate to higher savings, again, with our proposed consolidated entity.

Taking cognisance of a fast approaching ageing soceity, we would urge the government to consider our proposals. And we believe the government ought to consider our suggestions  in formulating it's 2023 budget.



Malaysia Trades Union Congress, Penang 

016 4184520