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Only 22 per cent EPF contributors have enough for retirement

EPF Head of Strategy Management Department Balqais Yusoff

EPF Head of Strategy Management Department Balqais Yusoff

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Written by Syndicated News

PETALING JAYA, May 15 2016 : Only 22 per cent of the 6.7 million Employees Provident Fund (EPF) active contributors aged 54 years have sufficient savings of RM196,800 or more to sustain themselves during retirement.

EPF Head of Strategy Management Department Balqais Yusoff said the other 78 per cent of the contributors, unfortunately, did not have the basic amount for their retirement years.

Stating that the retirement reality today was quite sad from EPF stand point, she said of the total EPF active contributors, 65 per cent had less than RM50,000 in their savings.

“Based on our definition of basic savings where retirees will need at least RM820 a month in their retirement years, those who have RM50,000 in EPF can go only for five years before their savings run out.

“That is if they live at RM820 a month. And we know that RM820 is not enough, that amount is probably sufficient for grocery shopping only and that’s the reality today,” she told Bernama here.

Balqais said the low salary structure in the country was a major contributor to the situation, whereby 89 per cent of the working population earn less than RM5,000 which translate into a lower saving rate for the EPF.

“In term of contribution rates in mandatory saving, Malaysia is the world’s fifth highest, but the salary structure does not translate into a high saving number.

“So, we need to constantly review the wage structure and the minimum wage also need to be aligned with the rising cost of living,” she said. – Bernama

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