Government mulls life-long pension for private sector
UPDATED @ 12:05:53 PM 18-06-2012
KUALA LUMPUR, June 18 — The Human Resource Ministry is in talks with the Employees Provident Fund (EPF) to set up a special life-long pension scheme for private sector workers to counter poverty issues and the rising cost of living, Datuk Seri Dr S. Subramaniam said today.
“We have not made a decision, and will have discussions with KWSP,” the human resources minister told a news conference, referring to the pension fund by its Malay initials.
“And we hope to reach a decision that’s agreeable to everybody,” Dr Subramaniam (picture) added.
He had earlier launched a seminar on administrative and operational efficiency in social security here.
He said that EPF contributors in the lower-income bracket “may get only RM50,000 or less at the end of the day” and “when they have that component, after three, four, five years that money is gone”.
“So what happens to them after that?” he asked.
“This is a real issue on the ground. Because after that they don’t have a support system,” he said.
Dr Subramaniam said he was a strong proponent of life-long pension as he believed it would provide security to the elderly and “help a lot of people be happy in their old age”.
He said he expected there would still be objections to the idea despite the benefits.
“This is the debate because if EPF wants to convert it into a monthly pension there will be serious objection because they (retirees) say ‘when I turn 55, I want to take all the money’,” the minister said.
“So we have to find a balanced mechanism to address this issue,” he added.
Asked why Putrajaya had raised the retirement age for the private sector to only 60 despite Malaysians now living longer, Dr Subramaniam said: “The law allows for increasing as you live longer.
“So now we have accepted in Malaysia, the government has put 60 for private sector.
“If you want me to increase it to 77 immediately it will be a very difficult job.”
Malaysian women, who form about half the number of the work force, live to an average of 77 years while the men live to be about 71.9, according to the data from the Statistics Department in 2010.