Finally, the foolishness of 'plundering' OLD AGE SAVINGS of workers in the private sector(who is not entitled YET to government pensions until they die) seem have been realized by Prime Minister Anwar Ibrahim - better late that never, BUT the question is whether damaged done can be resolved...
If the government of Malaysia(current and past) did not interfere in workers' OLD AGE SAVINGS, would there not be OLD AGE SECURITY for most workers?
Well, EPF's over 16 million members and total investment assets exceeding RM1 trillion was very TEMPTING for the government to 'abuse' - this was not government monies, it was INDIVIDUAL worker's savings.
So, the Malaysian government rather than providing funds to deal with Malaysia's economic situation - did not use Malaysia's monies, but 'TRICKED' the Private Sector workers by taking out their OLD AGE SAVINGS...before it was needed and to spend it...
EPF - Why did the EPF law prevent members from taking out money before Retirement Age? Well, the government/Parliament then knew that individual Malaysians are not all discipline enough to not touch this 'special savings for old age' before it is really needed for old age - thus the monies were only accessible after retirement age..
BUT, the government betrayed the people - and allowed pre-mature withdrawal - Account 1, Account 2.... and Anwar Ibrahim made it even worse, by creating Account 3 - the Flexible Account.
NOW, finally ANWAR realizes - but he seems to HAVE NO PLAN as to how to resolve this very serious problem... he has yet to even make proposals? I would propose a NEW National Pension Scheme that applies to all, different from the EPF Scheme and in addition, that may require all Malaysians to make regular minimum contributions monthly from a certain age to a certain retirement age - thereafter all will get a monthly pension until death.
2nd proposals - Enact a law, guaranteeing government aid to the elderly, who have no source of income, no property safe the house they are living in, to ensure that they will get MONTHLY a certain sum(maybe Minimum Wage plus) so that they are guaranteed a LIVING INCOME. A law is needed to make the government liable.
Currently, the government is just talking about 'SUBSIDIES/AID' and if it is not guaranteed by law - it is meaningless and not a RIGHT that can be enforced.
We also HOPE we get a Prime Minister/Government for ALL MALAYSIANS - but sadly, Anwar seems 'racist' - why did he talk just about Bumiputra
He [Anwar Ibrahim]said the latest data provided by EPF showed that ethnic Bumiputera contributors have one of the lowest retirement saving levels — with a median EPF savings of just RM8,920 as of December last year.
Why did he not provide data on just Malaysian EPF members - maybe the poorer groups like the B40, M40 ... Why did he not provide date based on age? The impression many get is that Anwar is concerned primarily for Bumiputra...
Anwar is FINANCE Minister - we expect us to tell us WHY EPF members reaching their RETIREMENT Age has so little in their EPF Accounts - as it is Mandatory for employee and EMPLOYER to make monthly EPF Contributions..
For an employee earning RM1,000 - that means the employee contributes say 13%, and Employee 11% = RM130 + RM110 = RM240, so, in a year, it will be RM2,880, and for 10 years of employment, it should be RM28,800, and for 20 years of employment, it should be RM57,600....
So, why is there some EPF members, after 20 years of employment having SO LITTLE in their accounts? Was it because the Malaysian government allowed them to withdraw using Account 1, 2 or 3? Or is it because, they were UNEMPLOYED for some time - government failure to ensure employment????
ANALYZE the data, Anwar Ibrahim, and tell us WHY some EPF members has so little in their Old Age Savings(Simpanan Hari Tua)?
Workers in the country should have Employees Provident Fund (EPF) savings of at least RM240,000 by the time they reach the age of 55 to enable them to retire gracefully, according to Deputy Finance Minister Datuk Seri Ahmad Maslan. He said the estimated savings would enable someone to sustain life for 20 years after retirement, with an expenditure rate of RM1,000 per month. “If someone retires at the age of 55, plus 20 years of post-retirement life, it would bring the total to 75 years, which is the life expectancy of Malaysians,” he said after visiting the Kelantan EPF headquarters here.24 July 2023, Ministry of Finance Website
FOOLISH - how can you expect anyone to survive on RM1,000 per month?
EPF has revised the amount one requires to have in one's EPF Savings - now, we need to have a basic savings at age 55 of RM390,000. > and that will give us about RM1,700 monthly for 20 years... Enough or NOT?
However, if we want a reasonable standard of living in retirement then we need at least RM650,000...
QUESTION - with this level of Minimum Wage (RM1,700), can Malaysian workers be able to even reach the targetted amount of savings of RM390,000 or RM650,000????
Malaysia also does NOT have EMPLOYMENT SECURITY - workers now do not even get REGULAR EMPLOYMENT (i.e. a guaranteed employment until retirement) - because most employers now only give workers short-term contract employment - usually 1 year or less... after that aging workers will have to compete with younger workers for the same jobs at the 'same' starting pays...Here, again is the Government's failure - they could, by law, insist that all employment be REGULAR EMPLOYMENT ... This will not prejudice employers - for termination of employment still can happen by reason of legitimate RETRENCHMENT, the fact that a serious employment misconduct is committed by worker that warrants termination,... But, for the worker it is GOOD as it removes the mental stress and provides assurances that the employment will be there...This means also maybe an annual wage increase, etc...
Now even government owned/link companies use workers of another employer(outsourcing??) rather that employing workers they need as their own employees - All that the Minister need to do is make an order prohibiting this - section 2A of the Employment Act
The Minister Anwar Ibrahim chose has not done this....(1) The Minister may by order prohibit the employment, engagement or contracting of any person or class of persons to carry out work in any occupation in any agricultural or industrial undertaking, constructional work, statutory body, local government authority, trade, business or place of work other than under a contract of service entered into with-
(a) the principal or owner of that agricultural or industrial undertaking, constructional work, trade, business or place of work; or
(b) that statutory body or that authority.
(2) Upon the coming into force of any such order, the person or class of persons employed, engaged or contracted with to carry out the work shall be deemed to be an employee or employees and-
(a) the principal or owner of the agricultural or industrial undertaking, constructional work, trade, business or place of work; or
(b) the statutory body or local government authority,
shall be deemed to be the employer for the purposes of such provisions of this Act and any other written law as may be specified in the order.
The question of whether this Anwar Ibrahim's government even prioritize the poor has also come into question - Hardcore Poor - Threatened With Door Removal by Local Council If Rent not Paid? Embarassing how Anwar's government treats the very poor? Anthony Loke's Constituency? Minister Nga - is this how Local Council behaves?
Anwar: EPF withdrawals will hurt retirement savings
KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim said allowing contributors to withdraw money from the Employees Provident Fund (EPF) would disadvantage them in their later years, leaving them without financial support.
The government will not provide excessive flexibility for EPF withdrawals, as the fund's primary purpose is to secure retirement savings, he said.
Anwar highlighted that while contributors see substantial returns from dividends, the majority, particularly within the Malay community, have minimal savings.
"If we open up rooms for withdrawals, it will create serious problems when they retire," he said during the Prime Minister's Question Time in Dewan Rakyat today.
Anwar was responding to a supplementary question from Nurul Amin Hamid (PN-Padang Terap) on whether the government would consider allowing targeted withdrawals for EPF contributors who have stopped working or lost their jobs.
Anwar said the government must create a balance between addressing pressing issues and ensuring people are not left without funds in retirement.
"If Padang Terap (Nurul Amin) has any specific cases to highlight, EPF can consider them on a case-by-case basis, as they have done for urgent situations," he said.
EPF is a Malaysian government agency that manages retirement savings for private sector workers.
It ensures financial security for members by investing their contributions and providing dividends on their savings. - NST, 4/3/2025
Anwar reiterates govt has no plans to introduce further targeted EPF withdrawals
KUALA LUMPUR, March 4 — Prime Minister Datuk Seri Anwar Ibrahim reiterated today that the federal government has no intention of introducing further targeted withdrawals for Employees’ Provident Fund (EPF) contributors.
Speaking in the Dewan Rakyat today, Anwar said the core principles of EPF hinges on retirement savings and the introduction of additional withdrawals will pose problems for these contributors several years down the road.
“By giving such a wide leeway, this will inevitably punish them when they retire or age.
“So the government has had to strike a balance between solving the urgent problem they faced and punishing them when they retire in the future with no means of self-contribution,” he said.
Anwar said this in response to Padang Terap MP Nurul Amin Hamid who had asked whether the government would consider introducing targeted withdrawals for contributors that are currently facing unemployment, debt and rising cost of living.
He said the latest data provided by EPF showed that ethnic Bumiputera contributors have one of the lowest retirement saving levels — with a median EPF savings of just RM8,920 as of December last year.
“I understand the concerns raised by YB and that is why there are also special exemptions provided,” he said.
However, Anwar also pointed out that any appeals made by contributors will be given due consideration by EPF, subjected to their respective circumstances necessitating an urgent withdrawal.
Anwar also said the government has no intention of imposing mandatory Shariah savings contributions for Muslims following a dividend rate of 6.30 per cent for both conventional and Shariah savings — the first since 2017.
“This [dividend] record is important because this will further encourage Muslims to contribute.
“With further encouragement and explanation, it is hopeful the number of contributors will increase,” he said in response to a supplementary question by Datuk Mohd Isam Mohd Isa.
Anwar also said the proposed two per cent mandatory EPF contribution for foreign workers will not divert the EPF’s attention from its specific focus on citizens’ retirement savings.
He said it has always been the government’s strategy to safeguard the interest of local workers.
The mandatory EPF contribution for foreign workers was announced by the prime minister during the tabling of the 2025 Budget last October.
Anwar reportedly said that the move is in line with the government’s commitment to providing fair treatment to all workers regardless of their nationality as per international standards.
Finance Minister II Datuk Seri Amir Hamzah Azizan had also reportedly said that the policy was aimed at improving wage equity and ensuring the local workers are not disadvantaged as the government aimed to close the wage gap between local and foreign worker - Malay Mail, 4/3/2025
How much do Malaysians need to retire comfortably? Here’s a complete guide
KUALA LUMPUR, Dec 17 — A recent Khazanah Research Institute report has highlighted a pressing issue: financial insecurity among Malaysians, with many potentially lacking sufficient savings for retirement.
According to the report, more than 52 per cent of Employees’ Provident Fund (EPF) members under 55 have savings of less than RM10,000.
Recognising this alarming trend, the EPF has introduced the Retirement Income Adequacy (RIA) Framework to help Malaysians plan for a more secure and comfortable retirement.
This initiative aims to educate members on the savings required to meet their post-retirement needs.Here’s an in-depth look at the RIA Framework and how it can guide you towards better financial planning.
What is the RIA Framework?
The RIA Framework is built around three tiers of savings:
Basic savings and income: Covers essential retirement needs
- Adequate savings and income: Supports a reasonable standard of living in retirement
- Enhanced savings and income: Provides greater financial independence and a higher quality of life
Savings targets
Based on the Belanjawanku 2024/2025 guidebook, the RIA outlines specific savings targets:
- Adequate savings: RM650,000, equivalent to 240 times the monthly adequate retirement income
- Basic savings: RM390,000, or 60 per cent of adequate savings
- Enhanced savings: RM1.3 million, double the adequate savings target
Monthly withdrawal strategies
The RIA recommends structured monthly withdrawals over 20 years, in line with Malaysia’s average life expectancy:
- Adequate savings (RM650,000): Start at RM2,708 per month, increasing to RM7,389 by year 20
- Basic savings (RM390,000): Start at RM1,625 monthly, rising to RM4,434 by year 20
- Enhanced savings (RM1.3 million): Begin at RM5,417 monthly, reaching RM14,779 by year 20
Implementation timeline
The RIA Framework will take effect from January 1, 2026, with phased increases in the basic savings requirement, starting at RM290,000 in 2026 and rising to RM390,000 by 2028.
To keep pace with economic changes, these benchmarks will be reviewed every three years beginning in 2029.
Managing excess savings
For members exceeding RM1 million in savings, the framework allows flexibility.
Up to 30 per cent of savings beyond the basic threshold can be invested in approved funds under the Members’ Investment Scheme.
Current challenges and adjustments
As of October 2024, EPF data shows only 36 per cent of active members meet the current basic savings level of RM240,000 at age 55.
The new benchmarks are expected to temporarily lower this percentage but are deemed necessary to address rising living costs and the current retirement age.
Notably, inflation erodes the purchasing power of savings.
For instance, RM1 million in 2007 has the same value as RM712,000 today. To maintain equivalent purchasing power, retirees now need RM1.4 million, which translates to RM6,000 per month over 20 years.
The four per cent rule
The Belanjawanku guidebook also recommends the “four per cent rule,” introduced by US financial planner William Bengen, as a prudent withdrawal strategy.
For example, retirees with RM1 million in savings could withdraw RM40,000 annually while preserving their fund.
The EPF advises members to leave remaining funds within the EPF and consult financial advisors for personalised retirement planning. - Malay Mail, 17/12/2024
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