SHAH ALAM: Human Resources Minister Datuk Seri M. Saravanan today proposed for a social safety net to be established via the Social Security Organisation (Socso) for private sector workers after they turn 60.
He said the social safety net for private sector workers coud be done by "switching" the existing contribution scheme to a pension-like scheme.
"Unlike those in the public sector who are protected by the government's pension scheme, private sector workers have no social safety net after their retirement except for their contributions to the Employees Provident Fund (EPF), which they can withdraw at the age of 55 and 60.
"Private sector workers contribute to Socso until they are 60. However, the day they become 60 and one day, they are no longer entitled to anything.
"Most chronic diseases come after the age of 60, but by then they have nothing to claim.
"As such, I am looking at the possibility to increase the contributions for Socso and after they turn 60, it becomes a pension-like scheme," he told the press after the launch of the Malaysian-level 2022 Workers Union Family Members Assembly (Perhimpunan Keluarga Kesatuan Sekerja Se-Malaysia 2022) today.
Saravanan added that he was currently doing an in-depth study on the matter.
"It has to be done and it is not an option. This is as we are heading towards an ageing nation by 2040."
He said one of the challenges of transforming the existing contribution scheme into a pension-like scheme is that more monthly contributions will be needed.
He said the last time the rate for monthly contributions was raised was in 1971.
Asked how long it would take to implement, Saravanan said: "For me to come up with the concept it would be at least six months."
Meanwhile, earlier in his speech, Saravanan said the government had conducted 14 extensive engagement sessions since last month to gauge views from stakeholders ahead of the second reading of the Trade Unions (Amendment) Bill 2022 scheduled to be tabled in Dewan Rakyat next month.
He said the engagement sessions involved trade unions, employers' associations and all state governments.
He added that the sessions were held following requests from stakeholders, especially from the Malaysian Trades Union Congress and Malaysian Employers Federation.
"They requested for more sessions to be held before the second reading. Therefore, we have had 14 sessions to date.
"This clearly shows that the government is always open and takes into account the input and views from stakeholders in policy making and decisions, especially involving the welfare and wellbeing of employees."