KUALA LUMPUR: The Employees Provident Fund (EPF) has noted that the 2019 Budget balances long-term imperatives with short-term needs.
Chief Executive Officer Tunku Alizakri Alias said the near-term measures spelled out in the budget were necessary to stabilise the country’s fiscal situation in order to put the nation on a solid growth trajectory.
“We are glad that the long-term well-being of Malaysians, ranging from affordable housing, healthcare, insurance coverage and public transportation, are also being looked into,” he said.
He added that beyond the short-term challenges facing the country, Malaysia is expected to become an aged nation by 2030, when there would be fewer working age people in the economy compared to today, supporting the needs of those who are retired.
Tunku Alizakri said the proposal to reduce the statutory employers’ share of EPF contribution rate for post-retirees from six per cent to four per cent should incentivise employers to hire or retain their older workers and can continue to leverage their skills and knowledge.
This is in line with the concept of active ageing, where retirees continue to contribute to the workforce, he said in a statement today.
On the proposal to include the employees’ share of contribution to be set to zero per cent once they reach 60 years, Tunku Alizakri said the EPF viewed this as a positive measure, as it would allow post-retirees to have higher take-home pay should they continue to work regularly, taking into account the need for liquidity in their retirement years.
Post-retirees who wish to continue saving with the EPF may opt for voluntary contributions instead, he added.
He said the EPF noted the government’s move to separate the tax relief for EPF contributions and takaful and life insurance as they fell under different aspects of a comprehensive social protection system.
While the measure may reduce the tax shelter element of EPF contributions, he said the move was a step in the right direction as it should be seen as an improvement in Malaysia’s social protection system as a whole.
In line with extending coverage to those in the informal sector, he said the government would continue its monthly contribution of RM40 for a minimum contribution of RM5 into the EPF i-Suri housewives’ account.
The i-Suri initiative, which was launched on Aug 15, 2018, has received positive response and as at end-October 2018, the total number registered is 28,963, which is equivalent to 13.29 per cent of those who are eligible under e-Kasih.
This incentive is expected to provide housewives with an avenue to save for their future well-being.
“This is an inclusive budget which takes into account the needs of all the major vulnerable segments of society,” Tunku Alizakri.
The measures broaden the foundation for the development of a strong social well-being infrastructure, he said, adding that, “Therefore, we are pleased that the budget is geared towards enabling Malaysians to live their lives with dignity before and beyond retirement.”--Bernama
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