Working out a decent pension

THE Government said its spending on the pension scheme is likely to escalate from the current RM5bil to RM10bil in the next six to eight years. Thus, it wants civil servants to begin contributing to the fund to ensure its sustainability. 

The fear is not unfounded. Since the 1990s, the welfare system of the Organisation for Economic Co-operation and Development (OECD) nations has been in crisis as a result of the drastic increase in the ageing population. This led to the social insurance eating up between a sixth and a third of the Gross Domestic Product (GDP), in which old-age and survivor’s pension make up one-third (Economist, 1998).