EPF has released it first half numbers, while its investments returns are looking there are more concerns on the domestic front on its members.
The pandemic and Covid-19 measures from here on will determine how the body navigates its resources, CEO Datuk Seri Amir Hamzah highlighted that the country’s recovery prospects were dependent on how the situation plays out in the near term.
“While we are confident that the Government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, we are very concerned about the retirement security of the people, especially with 46% of EPF members below the age of 55 having less than RM10,000 in their account.
“The pandemic has led to a significant drop in the percentage of members meeting the Basic Savings threshold (RM240,000 at age 55) from 36% to 27%, pursuant to the COVID-19-related withdrawals to supplement their income during the crisis. The pandemic has also triggered a dramatic rise in the number of gig workers in the country, and while that has helped workers survive, many of these workers are falling back on their retirement security due to the irregular and unstable income. Additionally, they are facing vulnerablities in terms of employees’ benefits and coverage on social protection.
This is a grave concern as this segment will further drift apart in terms of meeting their retirement needs, according to EPF there will be far-reaching repercussions not only on their future well-being, but also on the Government, who will have to carry that financial burden.
However, the retirement savings key strategy going forward is to get the gig workers, as well as those in the informal sectors, into the EPF Scheme so they can start to save as early as possible and plan for their retirement, adding that a coordinated solution for the longer term is needed to ensure better social protection for all Malaysians.
As the country recovers from the crisis, EPF’s focus must be to help members restore and rebuild their retirement savings to ensure that they are able to secure a dignified retirement. Its focus is on the Strategic Asset Allocation and continue to be cognisant of the risk profiles of the markets as they develop so it will be able to shift along the way.
