KUALA LUMPUR: The government's proposal to abolish the pension scheme for new civil servants will not affect the Employees Provident Fund's (EPF) assets allocation, according to its chief executive officer Ahmad Zulqarnain Onn.
He said the government expects to recruit about 30,000 civil servants a year, but this number will have little impact on the EPF's current 16 million members.
"This rule will only change things for new government workers. Since they earn less, the money we need to handle is not too much," he told reporters after announcing the EPF's financial performance here today.
He said EPF needs to deal with the issue of Makaysians not saving enough money for retirement, adding that they must save enough money for retirement.
"Our strategy is to educate the public. From the perspective of behavioural finance, once someone starts the habit of contributing to EPF, they most likely won't change that habit.
"We will find ways to make it easy for people to contribute," he added.
A worrying condition is that only 17 per cent of members aged 51 to 55 have achieved basic savings.
Ahmad Zulqarnain said EPF is also seeking ways to enhance retirement security for informal workers as it has become a growing phenomenon in Malaysia.
He said EPF is actively engaging the government to create policies that will cover the statutory contribution of informal or gig workers.
Ahmad Zulqarnain said there are jurisdictions around the world that cover this sector but Malaysia does not have that.
"But EPF's job is to advocate for this type of policy changes.
"We research and study the best practices across the world and we have close engagement with the government," he added.
During the presentation, he said the EPF has split its conventional savings and shariah savings portfolio into two separate portfolios, starting January 2024.
This is to give its portfolio managers flexibility, as well as take into account the differing performance of shariah-compliant and non-compliant assets' performance during the year, said Ahmad Zulqarnain.
"As you can appreciate, in the shariah portfolio, it is very difficult to have financial services exposure because from a global basis, the availability of shariah-compliant financial services companies is very limited.
"We then have to replace that exposure with something else and separating the two gives us greater flexibility in managing the assets," he said.