Govt steps up EPF reforms to strengthen retirement savings amid ageing population concerns

THE government has outlined a series of measures aimed at strengthening retirement preparedness among Malaysians, as concerns grow over the adequacy of savings in the Employees Provident Fund (EPF) amid rising living costs and the country’s transition towards an ageing society.

Responding in the Dewan Rakyat, the Finance Ministry said both the government and EPF remain committed to implementing long-term, structured reforms to improve retirement security and financial resilience among members.

It said Malaysia is expected to become an ageing nation by 2048, according to the Department of Statistics Malaysia, underscoring the urgency of strengthening long-term savings adequacy.

Among the key reforms is the restructuring of EPF accounts from two to three tiers, designed to balance immediate financial needs with long-term retirement security.

Under the new structure, 75 per cent of contributions are allocated to the Retirement Account for old-age savings, 15 per cent to the Sejahtera Account for conditional withdrawals such as housing, education and healthcare, and 10 per cent to the Flexible Account for short-term or emergency needs.

The ministry also highlighted efforts to expand EPF coverage through voluntary contribution schemes, particularly for self-employed workers, gig economy participants and informal sector workers under the i-Saraan programme.

It said a new initiative, i-Saraan Plus, will be introduced in 2026 specifically for e-hailing and p-hailing workers, offering incentives of up to RM600 per year and a lifetime cap of RM6,000, subject to eligibility conditions.

Additional schemes, including i-Suri and i-Sayang, continue to support women, spouses and homemakers in building retirement savings even without formal income.

The government has also expanded contribution flexibility through several mechanisms, including i-Topup for employees wishing to increase contributions beyond statutory rates, voluntary contributions capped at RM100,000 annually, and i-Legasi, which allows eligible members aged 55 and above with sufficient savings to transfer funds to younger family members.

As of May 2026, 63 applications under i-Legasi had been approved, involving RM46.3 million transferred to 86 recipients.

The ministry said these measures have contributed to gradual improvements in retirement adequacy levels.

As of 31 May 2026, 3.04 million active formal EPF members aged 18 to 60, or 38.3 per cent, had achieved the Basic Savings level of RM390,000 at age 60, up from 35 per cent in the previous year.

The government said it would continue strengthening cooperation with EPF to enhance incentives, broaden coverage and improve social protection mechanisms to ensure Malaysians have sufficient savings for retirement in the long term. - July 6, 2026