Policy paper: Improve Malaysia’s pension scheme by hiking age, cutting civil servants

Source: The Malay Mail Online

In EPF data reportedly dating back to 2015, 68 per cent of EPF members have less than RM50,000 in savings by the age of 54, while only 22 per cent had managed to save up to the then minimum targeted amount of RM196,800 set by EPF. — Picture by Yusof Mat Isa

KUALA LUMPUR, Feb 28 — Malaysia’s retirement fund systems for both the private and public sectors can be improved by increasing the pension age and by cutting down the number of civil servants, a policy paper launched recently suggested.

The policy paper co-authored by three academics said problems may arise in a social welfare system that is heavily dependent on young people’s contribution to support a growing number of senior citizens.

The 38-page policy paper by the Academy of Responsible Management was co-authored by Universiti Malaya’s Prof Edmund Terence Gomez, Institute for Leadership and Development Studies’ Noor Amin Ahmad, HELP University’s Prof Geoffrey Williams, with support from German political foundation Konrad Adenauer Stiftung.

It noted that Malaysia’s senior citizens — defined as aged over 60 — amounted to 9.5 per cent of the Malaysian population in 2016, while the United Nations 2016 Economic and Social Commission for Asia and the Pacific had projected this age group to grow to 23.6 per cent or almost a quarter of the country’s population by 2050.

“The public sector is at the centre of this dilemma as the largest employer in Malaysia,” the policy paper titled “Intervention and Non-intervention: Policy Ideas for a Social Market Economy in Malaysia” said, noting that the government’s bill for pension and retirement payments nearly tripled from RM8.25 billion to RM21.76 billion between 2007 and 2017. Read more