EPF launches 4 initiatives to improve current pension scheme

KUALA LUMPUR: The Employees Provident Fund (EPF) has launched four initiatives to improve the current scheme, including aligning the full withdrawal age with the minimum retirement age as determined by the government.

The other three proposals are aligning minimum contributions with minimum age legislation, extending dividend payments from the age of 75 to 100 years, and introducing shariah-compliant retirement savings in addition to the existing scheme

Chief executive officer Datuk Shahril Ridza Ridzuan said despite the changes in the full withdrawal age, the existing pre-retirement withdrawals remain unchanged.

"The proposals are designed to address issues related to the inadequacy of retirement savings among EPF members for the long term," he said at the launch of an EPF members' consultation exercise regarding the proposals.

He said according to EPF statistics, 78 per cent of active EPF members at the age of 54 have not achieved the basic savings of RM196,800 and 68 per cent of members at the age of 54 have savings lower than RM50,000.

"On the current issue concerning alignment of the retirement age and withdrawal age, members will be asked to consider two proposals -- extend full withdrawal age from 55 to 60 years on a staggered basis over 15 years, or maintain the age 55 withdrawal for existing savings and introduce a new age of 60 withdrawal for contributions of those working past the age of 55," he said.

Shahril Ridza said the EPF is utilising the consultation platform to actively engage with its members as it is a good way for them to understand the issues concerning their retirement well-being.

"We would like to reiterate that no decisions have been finalised at this stage and we highly encourage our members to take part in the process as their feedback is very important to us," he said.

He added that the proposal, if it receives good feedback from members, could be implemented as soon as next year. - Bernama