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Malaysiakini
an hour ago
- Business
- Malaysiakini
DAP MP urges Putrajaya to rethink new EPF mechanism plan
PARLIAMENT | A Pakatan Harapan representative has urged Putrajaya to rethink its plan to introduce a new payout system for the Employees Provident Fund (EPF). Cha Kee Chin (Harapan-Rasah) said the idea being proposed under the 13th Malaysia Plan (13MP) has received strong pushback from the rakyat.
Malaysiakini
9 hours ago
- Politics
- Malaysiakini
Guan Eng's views on migrants normalise 'ketuanan' dogma
"Today, you celebrate them. Tomorrow, you will go back to generalising them as cheats, liars and dirty." - Singaporean social worker Suraendher Kumarr on a sinkhole incident COMMENT | The quote that opens this piece is in reference to a news story about a group of migrant workers who rescued a woman in a sinkhole in Singapore. As the BBC piece elaborates, this ignited a debate about how migrant workers in Singapore are treated. In Malaysia, former finance minister Lim Guan Eng claimed that there was no need for a minimum wage or Employees Provident Fund (EPF) for existing migrant workers. In response, former Klang MP Charles Santiago reminded Lim that...
Focus Malaysia
2 days ago
- Politics
- Focus Malaysia
Does DAP agree with Guan Eng to exempt migrant workers from minimum wages, EPF benefits?
RECENTLY, former DAP secretary-general, current Bagan MP and party advisor Lim Guan Eng argued that Malaysia need not pay minimum wages to foreign migrant labour nor provide them with Employees Provident Fund (EPF) benefits. He even cited Singapore's exclusion of migrant workers from Central Provident Fund (CPF) as justification for his stance. Such a position might be expected from the leader of a pro-capitalist political party but coming from the leader of a party long considered social democratic, it is both baffling and deeply troubling. DAP is a member of the International Progressive Alliance and is affiliated with the Network of Social Democracy in Asia (SocDem Asia). To deny migrant workers these basic protections is to contradict the very principles the party claims to uphold. Malaysia's Federal Constitution makes no distinction between migrant and local workers in the provision of legislated minimum wages. All workers – foreign or local – are equal before the law. While Malaysia is not a signatory to certain International Labour Organization (ILO) conventions on wages and benefits, the absence of these legal commitments does not prevent the enforcement of universally accepted labour standards. Guan Eng's statement is not just an affront to migrant workers; it undermines DAP's claim to be a social democratic party. By rejecting minimum wages and social security benefits for migrant labour, the party appears to side against the most basic democratic demands of a vulnerable section of the workforce. DAP's leadership must now answer clearly: is the party still committed to social democracy or has it abandoned those principles entirely? Silence will be taken by the Malaysian public – especially the working class – as proof that DAP no longer represents the rights of the subaltern sections of society. If this is indeed the case, the party should openly re-define its political ideology while regional and international umbrella bodies must consider whether DAP still deserves to be recognised as part of the global social democratic movement. – Aug 9, 2025 Former DAP stalwart and Penang chief minister II Prof Ramasamy Palanisamy is chairman of the United Rights of Malaysian Party (Urimai) interim council. The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia. Main image credit: Lim Guan Eng/Facebook
Sinar Daily
2 days ago
- Business
- Sinar Daily
Malaysia faces retirement time bomb as longer lifespans, shrinking tax base threaten pension system
SHAH ALAM - Malaysia's retirement system is facing growing pressure as increasing life expectancy, declining savings and a shrinking taxpayer base raise doubts about the long-term viability of the nation's pension structure. Worries over Malaysians' preparedness for retirement have deepened, coming only three years after the government permitted large-scale withdrawals from the Employees Provident Fund (EPF) to help offset job losses during the Covid-19 pandemic. EPF Chief Executive Officer (CEO) Ahmad Zulqarnain Onn stressed the urgency for immediate action, saying it was crucial 'to ensure Malaysians are both financially and socially prepared for longer lifespans.' Projections now indicate that life expectancy could reach 81 years by 2050 — just 25 years away. With a rapidly aging population and a falling birth rate leading to a contracting tax base, fears are growing that future retirees may simply not have enough to live on. Malaysia's retirement savings landscape Malaysia's primary retirement mechanism is the EPF, a defined contribution (DC) scheme in which savings are built through employee and employer contributions, along with investment returns. Civil servants still enjoy a legacy defined benefit (DB) pension that guarantees monthly payouts based on final salary and tenure. While the DB model provides secure retirement income, it imposes significant long-term costs on public finances. Globally, DC schemes are seen as more sustainable because they shift investment and longevity risk away from governments, give individuals greater control over their funds and are easier to manage fiscally. The Covid-19 withdrawals hit hard Economic uncertainty in recent years has tested the resilience of Malaysia's DC model. During the pandemic, more than 8.1 million EPF contributors withdrew over RM145 billion from their accounts, often to cover immediate expenses such as rent, food and debt repayments. The result has been devastating to retirement readiness. Half of members aged 55 and below now have less than RM10,000 each, with the median balance at only RM10,898. Many accounts have been emptied entirely. The lifespan of the average Malaysian has risen, forcing the younger generation to bear the burden of sustaining them through old age for a longer period. Photo: Edited via Canva Living longer, but with less Life expectancy in Malaysia has risen sharply over the past three decades. Men now average 74.8 years and women 78.9 years, compared with 68.7 and 73.4 years respectively in 1990. This longevity comes at a cost. Someone retiring at 60 and needing RM1,500 a month for basic living expenses would require at least RM360,000 to last two decades. Yet, as of 2023, nearly 74 per cent of active EPF members had savings of under RM100,000. Enough for just five to six years, excluding healthcare and elderly care costs. A shrinking tax base compounds the problem Falling birth rates and low tax revenue are further eroding the sustainability of Malaysia's pension system. The country's tax-to-GDP ratio was just 12.6 per cent in 2023, far below the Asia-Pacific average of 19.3 per cent and the OECD average of 34 per cent. According to the Department of Statistics, the live birth rate dropped by 10.2 per cent to 100,732 in the second quarter of 2024 compared with the same period a year earlier. If this continues, there will be fewer taxpayers and EPF contributors in the future, even as more Malaysians retire. Countries that maintain generous DB pensions do so through high taxation and large reserves — conditions Malaysia does not currently have. Without reform, experts warned, the current system risks becoming unsustainable. Potential solutions on the table Experts suggested several measures to safeguard against retirees outliving their savings. These include promoting financial literacy, enhancing saving incentives, creating a modest social safety net and expanding aged-care facilities. One proposal is to introduce a hybrid pension system. Under this model, employees would keep contributing to EPF, but upon retirement, only part of their balance could be taken as a lump sum. The rest would be paid out monthly for life, similar to Singapore's CPF Life. This would reintroduce a guaranteed minimum lifetime income — a feature of the old DB pension — without overburdening public finances. In addition, tax incentives, matching contributions and voluntary top-up schemes could help rebuild depleted savings. The urgency for reform is growing. As Ahmad Zulqarnain emphasised, Malaysia must act now 'to ensure Malaysians are both financially and socially prepared for longer lifespans.' Without decisive action, today's workers could become tomorrow's financially vulnerable elderly — living longer, but going broke sooner.
The Star
3 days ago
- Business
- The Star
EPF pension for new ones
Interested existing contributors may opt in voluntarily A NEW pension-style withdrawal structure under the Employees Provident Fund (EPF) will apply only to new members who register after the mechanism is implemented, says Deputy Finance Minister Lim Hui Ying. She said the monthly pension payout scheme will not affect the withdrawal rights of existing contributors, and current members will not be automatically placed under the new system but may opt in voluntarily. 'The proposed restructuring of EPF accounts will introduce a new mechanism that allows part of a member's savings to be allocated specifically to provide a regular income stream throughout their retirement years,' she said during Question Time. Lim was responding to Mordi Bimol (PH–Mas Gading), who had asked about the rationale for introducing monthly pension payments as outlined in the 13th Malaysia Plan (13MP) by Prime Minister Datuk Seri Anwar Ibrahim. She said the new structure is aimed at ensuring retirement savings last longer, in line with longer life expectancy. Under the proposed system, EPF savings will be split into two components upon reaching the minimum retirement age: a flexible savings portion, which can be withdrawn at any time, and a retirement income portion, which will be disbursed on a monthly or periodic basis until depleted. 'This structure is designed to strengthen income security in old age and support more sustainable financial planning,' she said. Meanwhile, Lim also addressed concerns raised by Tan Sri Muhyiddin Yassin (PN–Pagoh) over EPF's investment performance, noting that the fund recorded a 13% decline in returns for the first quarter ending March 31, 2025, compared to the same period in 2024. She said the drop was due to multiple factors, but added that a recovery is anticipated in the second quarter. 'We expect a positive response and rebound in the second quarter of 2025 compared to the same period last year,' she said, without elaborating on the exact causes behind the decline. According to EPF, during 1Q 2025, equities contributed RM10.81bil, a 23% decline from RM14.02bil recorded in 1Q 2024, mainly due to weaker performance across global equity markets and a challenging investment climate. EPF said equities continued to be the highest contributor, accounting for 59% of total investment income while fixed income continued to anchor capital preservation, contributing RM5.99bil or 33% of total investment income.
