‘NEED TO REVIEW RETIREMENT SAVING PLANS’
Deputy minister says interventions necessary amid rising ageing population
THE government will review retirement saving schemes, including the age for retirement, to cope with an estimated 3.5 million ageing population by 2020.
Deputy Finance Minister Datuk Amiruddin Hamzah said the number was expected to reach 6.3 million by 2040, signalling the need to revisit retirement fund objectives and early withdrawal facilities provided by retirement fund bodies, such Employee Provident Fund (EPF), and other retirement benefit schemes.
“We are moving into ageing nation at a much faster rate compared with other countries such as Europe and the United State.
“Some measures need to be put in place to intervene with the rate of becoming an ageing nation.
“Some of the interventions that we are looking at is to review some retirement schemes offered by the EPF and other financial institutions,” said Amiruddin after launching Affin Hwang Asset Management Bhd’s government and public sector communications office, here, yesterday.
Affin Bank chairman Tan Sri Dr Mohd Zahidi Zainuddin was present to officiate at the new office.
Amiruddin said EPF contributors were allowed to make withdrawals for house purchase, education and medical purposes, adding that the government might review these withdrawals as well as the possibility of increasing the retirement age, among others.
He said most pensioners would use up all retirement savings after five years of retirement, thus it was crucial for the government to review retirement savings to ensure that the savings were sufficient for the ageing group to sustain their livelihood.
“There would be direct interventions of providing a more sustainable pension amount and ‘Bantuan Sara Hidup’ aids to help groups that are in need of assistance.
“For now, there are no reviews in progress but we are looking into whether there was a need for a review to be carried out (on the retirement schemes),” he said.
He said there was a need for an emphasis on financial inclusion, especially in the Bottom 40 per cent income group, who were struggling with the high cost of living.
It was previously reported that the Malaysian population is expected to increase to 32.4 million this year, but the national fertility rate is projected to decline to the lowest level ever since 55 years.
For every 1,000 people, only 15.8 live births are expected this year compared with 16.1 in 2017.
Taking the current rate of retirement of 20,000 to 25,000 civil servants annually, the pension payout in 10 years would be RM63 billion and public pension bill is expected to hit RM100 billion by 2050.