THE Social Protection Contributors’ Advisory Association Malaysia (SPCAAM) which recently advocates the extension of retirement age from 60 to 65 years has hit out at the Malaysian Employers’ Federation (MEF) for the latter’s narrow view of “workers as just another factor of production and not as human beings”.
SPCAAM’s international labour advisor Callistus Antony D’Angelus claimed that MEF and business communities which are expectedly opposing its proposal, have never provided any solution to the economic and social issues whereby the Employees Provident Fund (EPF) savings have been inadequate for a sizable population of employees in the private sector.
“What the likes of the MEF are essentially advocating for is a system where profits are internalised whereas losses and social costs are externalised,” D’Angelus pointed out in a statement.
“The argument that workers need to retire in order for younger workers to be employed – if it holds out to be true – points to a failed economy. Is it really the case that different generations are in employment to do the same type of work?”
He added: “Essentially, they do not care for the individual or country’s economic issues. What they are concerned about are only the maximisation of profits for themselves.
“When factors such as an increase in medical costs are put forth by businesses as an excuse why the retirement age should not be extended, it tells of the kind of social responsibility exercised by such businesses.
“What happens when workers who retire are unable to sustain themselves economically? Is the government in a position to provide a social safety net for such people?”
Despite the polarised positions due to the increased democratic space in Malaysia afforded by Prime Minister (PM) Datuk Seri Anwar Ibrahim’s administration, D’Angelus stressed that there is a need to take a step back and “cast ourselves as either on the side of labour or capital”.
“We need to recognise that in spite of the often-adversarial positions, it has to come together to work as one,” he stressed. “After a long while, there is a real chance for systemic and real change in Malaysia. We need to look at what is best for Malaysians and Malaysia.”
As it is, 81% of EPF contributors will not have enough savings to live above the poverty line upon their retirement. As of end-December last year, only 19% of EPF contributors have reached the basic savings level based on their age to enable them to have RM240,000 in savings by the age of 55.
“This directly shows that 81% of contributors aged 55 and below are in a serious situation where their savings will not be enough for them to retire above the poverty level,” revealed Anwar who is also the Finance Minister recently.
He was replying to a written parliamentary reply to Gombak MP Amirudin Shari who wanted to know the breakdown of EPF contributors based on their latest savings and how many do not have enough for their retirement.
Anwar went on to share that more than half (56%) of those who will be able to withdraw their EPF savings fully in a year – those who are 54 years old now – have RM50,000 or below in their retirement fund.
“RM50,000 can only provide retirement income of about RM208 a month for a period of 20 years,” he projected.
As of Dec 31, 2022, more than 51% of the 13.1 million contributors below 55 years old have RM10,000 and below in their EPF funds. Of this number, 26% are 40 years old and above, meaning those who can withdraw their retirement savings within 15 years. – April 12, 2023
