EPF: Make sure there’s enough

Right move: Samsudin (left) with EPF deputy chief executive officer (Strategy) Tunku Alizakri Raja Muhammad Alias showing a report by EPF.

KUALA LUMPUR: Those who opt to cut their Employees Provident Fund (EPF) contribution rate from 11% to 8% need to make sure that they have enough money for their retirement years, said chairman Tan Sri Samsudin Osman.

He said this was because their retirement years were likely to be longer due to the rising average life expectancy among Malaysians.

“About 50% have opted to maintain the current rate of 11% and that’s good. It tells me that a large number are concerned about having enough in their EPF,” Samsudin told reporters after giving a keynote address at the International Social Security Conference here yesterday.

The two-day conference, themed, “Active Ageing: Live Long and Prosper”, is jointly organised by EPF and financial service provider State Street, with The Star as media partner.

On Tuesday, Second Finance Minister Datuk Johari Abdul Ghani had said that 50% of contributors opted to retain their EPF contribution rate at 11%.

The option, announced during the revision to the 2016 Budget in January, gives employees a choice to cut their EPF statutory contribution rate from 11% to 8% for those below 60 years of age.

Those above 60 can opt to cut their contribution from 5.5% to 4%.

The reduction is in force from March to December next year.

EPF, said Samsudin, also planned to publish a report next year on the many issues relating to social security and retirement planning in Malaysia.

The report aims to share knowledge and promote awareness and understanding about the country as an ageing society.

“We hope to see all these issues discussed and addressed for the sake of the country’s future because the certainty is that Malaysia is ageing,” he said.

Samsudin said the average life span of a Malaysian was 50 years in the 1950s but was now 75. By 2030, 14% of the country’s population will be above the age of 60.

Malaysia, he added, did not have much time left to prepare for the challenges that would come due to the increasing number of the elderly.

The country, said Samsudin, needed suitable policies and laws relating to minimum retirement age, minimum wage and employment.