PETALING JAYA: The government has no intentions to implement a universal pension scheme due to the related costs, says Nurhisham Hussein.
The Prime Minister’s Office (PMO) senior director of economics and finance, said that Malaysia’s retirement system has significant gaps, with many Malaysians relying on their children for retirement support.
Nurhisham, formerly the chief strategy officer at Employees Provident Fund (EPF) noted that shrinking family sizes mean fewer working adults are available to support retirees.
"We are considering several reforms, but implementing them quickly is unlikely.
"We still need to garner public support, and a full-scale national pension scheme is currently unaffordable," he said.
Speaking on BBC Radio 4’s "Crossing Continents" programme titled "Ageing without a Safety Net in Malaysia," Nurhisham confirmed that he was referring to a universal pension scheme.
Such schemes in countries like the Netherlands, New Zealand, and Sweden provide a minimum income to all citizens upon retirement age, funded through taxation.
Although proposed to address low EPF savings among Malaysians, Nurhisham cited the country’s relatively low tax levels as a barrier to funding such a plan.
"Culturally, we haven’t prioritised community sacrifice and our relatively low tax rates limit our ability to fund a universal pension scheme," he added.
Last November, Prime Minister Datuk Seri Anwar Ibrahim revealed that 6.3 million EPF members, or 48% of those under 55, have less than RM10,000 in their retirement savings—equivalent to less than RM42 per month over 20 years.
