The current contribution rate for the Employees Provident Fund (EPF) is sufficient as it has been adjusted with the minimum wage of workers.
Deputy Finance Minister Datuk Chua Tee Yong (pic) said the move to raise contributions will affect the “take home pay” of workers and affect their daily living expenses.
“The percentage of increase in contribution rates of the employee and employer shares can certainly have a double impact on their retirement savings.
“However, EPF needs to be aware of and take into account other factors, such as the current economic condition of Malaysians who are bracing for rising cost of living,” he said in his reply to a question from Senator Datuk Yoo Wei at Dewan Negara in Kuala Lumpur today.
Chua said EPF savings are meant for retirement and depends on several factors such as the rate of wages, the employer and employee contribution rates, the annual dividends and any withdrawal made before the age of 55.
He said withdrawals are for the purpose of buying a house, pilgrimage, education, health and disability as well as partial withdrawal at the age of 50.
The adequacy of their retirement savings also depends on their awareness to save early to coordinate the savings with the desired lifestyle after retirement, he added.
“Members should also take into account their health condition on retirement by having ample savings in view of rising health costs,” he said.
Meanwhile, the EPF has been urged to use a medium other than i-Account to conduct a survey on the proposed four initiatives to improve current pension scheme which was launched yesterday.
Chua said not all 6.5 million active EPF members were registered with the i-Account.
“I have discussed with the EPF so that the survey will be conducted in more platforms to gather members views. There is no set time frame for the survey, but what is more important is how the EPF can ‘reach out’ to members,” he told reporters at the Parliament lobby in Kuala Lumpur today.
news source & image credits: themalaysianinsider.com