KUALA LUMPUR: An alarming number of Malaysian workers – well over six million who are self-employed or in the semi-formal sector – are not covered by any retirement scheme due to a lack of a comprehensive social protection system.
Employees Provident Fund (EPF) deputy chief executive officer (Strategy) Tunku Alizakri Alias said 10% of the labour force was covered under the pension scheme and 46% under the EPF because this is mandated by law, but another 44% are left out.
“We are a bit worried even if they (the 44%) must know what they are doing.
“In terms of financial literacy, they must try and upscale themselves as fast as possible,” Tunku Alizakri told reporters after the International Social Security Conference here yesterday.
The two-day conference themed Active Aging: Live Long and Prosper is jointly organised by the EPF and financial service provider State Street, with The Star as media partner.
For those who need help, he said, there are avenues including Bank Negara or EPF’s retirement advisory services.
Those who needed a financial health check “can come and meet up with us.”
“It’s free but they need to be as open as possible, just like going for a medical health check,” he said.
He advised all employees to know what they wanted for retirement and prepare for it accordingly.
During his closing remarks, EPF chief executive officer Datuk Shahril Ridza Ridzuan said based on local and foreign experience, expecting those in the semi-formal sector, who are clueless on how to provide for themselves and for retirement, was a very challenging policy issue.
“It’s essentially how to force people to contribute to their future wellbeing.”
He added that next year’s social security conference would tackle this issue and the trend of young people who are increasingly uninterested in traditional jobs.
“This is a key issue not only for Malaysia but also for other countries that grapple with this challenge,” he said.
On a side note, Shahril said the response to the new Syariah-compliant scheme has been very encouraging.
He estimated over 150,000 EPF members, or about 40,000 a day since its launch on Monday, have made the switch from the conventional scheme.
The Syariah scheme, he said, was EPF’s way of transforming and adapting to the demands of its members.