WHEN workers were enticed to withdraw monies from their Employees’ Provident Fund (EPF) savings to sustain themselves during the pandemic, it resulted in only about 3% of them having adequate savings to afford to retire comfortably.
It proved the fact that our working population do not have enough retirement savings, or none whatsoever in some cases. Given the fact that we are becoming an ageing society, coupled with inadequate retirement funds, our nation may well be heading towards a future that will witness growing poverty.
Without sustainable post retirement savings, our senior citizens would either be compelled to continue working or become dependent on the goodwill of the society for survival, unless the Government initiates an appropriate social safety system to address the situation.
Therefore, the Malaysian Trades Union Congress (MTUC) believes that it is time to implement a comprehensive post retirement safety net.
Here are several suggestions:
- Merge the EPF and Social security Organisation (SOCSO) so as to consolidate their resources to introduce a retirement safety scheme.
As we understand, the EPF investment assets are worth about RM1 tril 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 can be made possible.
- Set aside a portion of the tax collected for the retirement fund.
With the consolidation of EPF and SOCSO, with an annual allocation of a portion of taxes collected to the said entity, we believe that a retirement safety scheme can be introduced.
- 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.
- Move Towards a Living Wage.
While we welcome progressive improvements to the minimum wage, it still does not meet the threshold living wage module as expounded by Bank Negara Malaysia (BNM). According to the central bank, an individual needs a living wage of RM2,700 to sustain him or herself.
By moving towards a living wage, it would translate to higher savings to our proposed consolidated entity.
Taking cognisance of a fast-approaching ageing society, we would urge the Government to consider our proposals. And we believe the Government ought to consider our suggestions for Budget 2023. — June 12, 2022
K Veeriah is the secretary of the Malaysia Trades Union Congress, Penang chapter.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
