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The Ministry of Finance describes the Employees Provident Fund (EPF) savings crisis as serious. Nearly half of the membership, 6.3 million under 55, had less than RM10,000 on September 30.
The Ministry of Foreign Affairs stated in a written response that was published on the website of the Parliament today that the number increased from the 4.7 million members (37 percent) that were registered in April 2020, before the implementation of exceptional withdrawals relating to Covid-19.
It is anticipated that members will get a retirement income of less than RM42 a month for a period of twenty years if they have savings that are less than RM10,000 throughout their lifetime.
Related link: Insufficient Retirement Savings Becoming A Concern In Malaysia
“The additional withdrawals from Account 1 also have a long-term effect, which is a significant reduction in retirement savings among EPF members,” it said in response to the question that Zulkifli Ismail (PN-Jasin) posed about the initiative that the government is taking to address the problem of insufficient retirement savings among the people. This problem is compounded by the large informal sector in Malaysia and a higher dependency ratio.
According to the ministry, the issue is being taken quite seriously, especially considering that the country is currently coping with an aging population that is growing rapidly. The economy, productivity, social welfare, quality of life, and public health of the country and its citizens are expected to be significantly impacted by this.
The government said in the 2024 Budget that the i-Saraan program’s matching grant cap will rise from RM300 to RM500 annually, with a lifetime maximum of RM5,000 for each eligible person. This increase was made possible by the government’s increased funding.
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