The Employees Provident Fund (EPF) announces that beginning 1 January 2019, the EPF minimum contribution of both the employees’ and employers’ share, will be aligned with the Minimum Wages Order (Amendment) 2018 of RM1,100 for both the Peninsular Malaysia and Sabah and Sarawak.
With the new measure in place, the expected monthly contribution to be received by the EPF for every worker who earn monthly wages will be no less than a minimum of RM264, subject to the worker being employed for the full month. Different minimum contribution may also apply to members who are salaried on a weekly, daily or hourly basis.
Out of the 7.11 million active EPF members, a total of 1.64 million, or 23 per cent, contribute less than the current minimum wage of RM1,000. Low monthly contribution is likely to result in lower retirement savings for members. The EPF statistics show that a total of 64 per cent of members who have reached age 54 years have savings below RM50,000, which is a meagre sum when taking into account the rising cost of living and household debt.
EPF Chief Executive Officer Tunku Alizakri Alias said, “Low wages, particularly among low-income earners, is one of the primary causes that many Malaysian workers retire with insufficient funds. Alignment of the minimum wage should help EPF members achieve sufficient savings for their retirement and help strengthen their future financial resilience.”
Notices have been sent to all employers registered with the EPF on this matter, and the EPF will work closely with employers to ensure the smooth implementation of this policy.
“We are confident that employers will benefit from this in the long run as it will help to increase productivity, loyalty as well as incentivise employees to do their best for the organisation,” said Tunku Alizakri.
He added that with the proven success of EPF’s Retirement Advisory Services for members, the EPF will be providing free advisory services for employers, including having dedicated officers to manage the employers’ relationship with the EPF.
For more information, call the EPF Contact Management Centre (CMC) at 03-89226000 or refer to the EPF website at www.kwsp.gov.my
, or visit any of the 67 EPF branches nationwide.