Anwar Ibrahim Calls for Urgent Pension Reforms to Secure Financial Future for Malaysians
"EPF data shows that one in four members exhaust their savings within five years after reaching the withdrawal age," Anwar stated while insisting on pension reforms
In a compelling call for action, Prime Minister Datuk Seri Anwar Ibrahim has urged Malaysia to undertake substantial reforms in its pension and retirement framework to guarantee financial security and equity for all citizens.
Addressing the International Social Wellbeing Conference 2024 (ISWC 2024), Anwar highlighted alarming statistics from a recent survey, which revealed that 26.1% of Malaysians over the age of 60 plan to work until their health fails due to income insecurity during retirement. This paints a grim picture for the older population, who are significantly more vulnerable to poverty, with only 29% currently enjoying a pension or pension-like income.
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"EPF data shows that one in four members exhaust their savings within five years after reaching the withdrawal age," Anwar stated, referencing the Employees Provident Fund. "The lump-sum nature of the EPF benefit leaves many Malaysians unable to sustain a reasonable standard of living in retirement or manage longevity risks."
As both Prime Minister and Finance Minister, Anwar emphasized the urgent need for a comprehensive overhaul of the national pension framework to ensure future generations can age with dignity. He proposed new solutions to ensure no one is left behind and to extend social protection benefits to all segments of society.
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One such solution involves expanding EPF coverage in phases to include a larger portion of the working-age population, enabling more Malaysians to build adequate retirement savings. This initiative is crucial as Malaysia is projected to transition from an ageing nation to an aged nation within just 23 years, with 14% of the population expected to be over 65.
In alignment with this demographic shift, the unity government is dedicated to enhancing the lives of older Malaysians and fostering a more inclusive society, consistent with the concept of Madani. Anwar outlined plans to reinforce two pillars of social protection:
- Social Assistance: Strengthening programs to provide support and safety nets for Malaysians facing financial hardship.
- Labour Market Initiatives: Enhancing training programs, unemployment assistance, and other measures to secure better job opportunities and improve living standards.
"We are committed to building a society where every Malaysian, regardless of age, can enjoy financial security and a decent quality of life," Anwar declared, reinforcing the government's dedication to social welfare and economic stability.
This call to action signifies a pivotal moment for Malaysia, as it prepares to address the challenges of an ageing population and ensure a sustainable and equitable future for all its citizens.