BUKIT MERTAJAM – A veteran unionist wants the Finance Ministry to form an old-age social protection scheme in the wake of the Employees Provident Fund’s (EPF) disclosure that only 3% of its contributors can afford to retire in the wake of the Covid-19 crisis.
Given the reality that an overwhelming number of workers under private firms are left with insufficient savings to retire, Penang Malayan Trade Union Congress secretary K. Veeriah is proposing that the government seriously consider the scheme for the private sector.
“On this score we would propose that a nominal sum from taxes collected be set aside for a pension fund or, alternatively, be channelled to EPF where an equitable pension payment scheme be devised to provide for retiring workers,” he said.
“Until such proactive measures are put in place at the soonest, we may stand witness to an ageing population that would neither have sufficient EPF savings post-retirement nor an old age social security network to provide it with financial sustenance.”
Veeriah said that the disclosure by the EPF had only confirmed the worst fears of the union that the social security net for retiring workers is fragile in view of the move to allow them to prematurely withdraw their savings due to Covid-19.
“It is a wake-up call,” said Veeriah in a statement.
The truth remains that massive withdrawals, estimated to be about RM70 billion, is the main factor to this sad state of affairs, he said.
The financial challenges, brought about by the onslaught of the pandemic, would have warranted that the government provide sustained financial assistance to the people.
The government, however, deemed it fit to allocate piecemeal financial handouts that were grossly inadequate to meet the monetary obligations of those who had either lost their jobs or had their incomes reduced by pay cuts.
“While defaulting on its obligations, moral or otherwise, to provide meaningful financial assistance to the people, the government has enticed the people to dip into their retirement savings to mitigate their financial commitments.
“Sadly, the folly of the government has, now, morphed to the reality that about 97% of EPF members would not have the privilege of retiring upon attaining the retirement age of 60,” he said.
As Malaysia is fast moving towards an ageing population the question that needs to be postulated is the consequences of working beyond the retirement age, Veeriah noted.
A study by the World Health Organisation and the International Labour Organisation has revealed that working long hours can lead to work-related deaths.
Covid-19-related withdrawals over the past two years have had a massive impact on the savings of EPF contributors.
Currently, only 3% of contributors can afford their retirement, said EPF chief strategy officer Nurhisham Hussein.
He was quoted as saying that the withdrawals, namely i-Sinar, i-Lestari and i-Citra (schemes), resulted in many members below age 55 having critically low savings.
“Even with Covid-19, 80% of Malaysian men and 90% of Malaysian women will reach age 60, while one out of three men and two out of three women will reach age 80.
“We now estimate that only 3% of Malaysians can afford to retire,” Nurhisham said.
By December, 54% of EPF members aged 54 would have less than RM50,000 in their savings account while the majority of those who withdrew their entire EPF savings upon reaching the age of 55 would have used it all up within two or three years. – The Vibes, November 1, 2021
