67% of EPF members not ready for old age

November 23, 201510:17 am428 views

Malaysia is heading towards an aged nation by 2030 but as many as 4.46 million or 67% of Employees Provident Fund’s active contributors have not achieved the basic saving requirements.

Deputy Finance Minister Datuk Chua Tee Yong said an EPF member needed to have at least a minimum savings of RM820 per month for 20 years, which would come up to RM196,800 in his or her old age.

However, only 33% achieved this, said Chua.

“Financial literacy in Malaysia is still quite low, with only 20% to 25% of Malaysians having knowledge about financial planning,” he told reporters after a briefing on the fund’s Retirement Advisory Service (RAS) here yesterday.

The RAS, said Chua, was to provide information on preparing for retirement.

“Young working adults should seek advice early to understand what needs to be done for retirement,” he said, adding that they should also consult the Credit Counselling and Debt Management Agency (AKPK) to understand debts and financial commitment.

With Malaysia targeted to become an aged nation by 2030, Chua said it was only proactive for EPF to offer the service.

Since the service started in July last year, seven EPF branches are now offering RAS – Kuala Lumpur, Petaling Jaya, Johor Baru, Seberang Jaya, Ipoh, Kota Kinabalu and Kuantan.

Another 10 branches will be offering the service by the end of next year. As at Nov 15, 7,297 EPF members have sought advice from the free service.

On the level of public confidence towards EPF following the 1Malaysia Development Bhd (1MDB) issue, Chua said it was explained in Parliament recently that the fund had only invested in the bonds of independent power producers and not 1MDB.

“It was 1MDB which subsequently acquired the IPP plants and as such, the debt that came with it,” he said, adding that prior to 1MDB acquiring the plants, it was just a normal investment for bonds.

Last month, Deputy Finance Minister Datuk Johari Abdul Ghani said in Parliament that EPF did not make any direct investment in 1MDB.

Replying to a question by Datuk Seri Abdul Ghapur Salleh (BN-Kalabakan), Johari said EPF had invested in the bonds of power producers Jima Energy Ventures Sdn Bhd and Panglima Power Sdn Bhd, which belonged to 1MDB.

 

news source & image credits: thestar.com.my

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