Published: Monday September 26, 2011 MYT 4:26:00 PM
Updated: Monday September 26, 2011 MYT 4:39:35 PM
EPF hopes Govt will extend private sector retirement age to at least 60
KUALA LUMPUR, Sept 26 (Bernama) The Employees' Provident Fund (EPF) hopes the government will extend the private sector retirement age to at least 60 from the present 55 in the coming budget announcement, its chief executive officer, Tan Sri Azlan Zainol, said.
"I would hope for 58, if not 60, as the retirement age," he told reporters after delivering his keynote address at the Malaysia's Private Pension and Healthcare Conference 2011 here today.
He also wished for something on the minimum wage to be included in the budget.
Earlier, in his keynote address, Azlan said there were two issues that Malaysia needed to address in implementing an efficient pension system.
"One is the rapid ageing of the people and second, the low amounts of retirement savings that make retirees vulnerable to slipping into poverty," he said.
Azlan said while France and the US took 115 and 69 years respectively to move from "ageing" to "aged" nation, Malaysia was expected to take only 27 years.
On the inadequacy of retirement savings, he said the concern was two-fold.
"First, the monthly amount is smaller than 2009 poverty line income of RM800 a month and non-active members, who in 2010 were aged 54 outnumbered active members by three-fold," he said.
He said looking at the actual distribution of savings of this group, 73 per cent of them had less than RM50,000 saved while only 17 per cent had over RM100,000 at the point of their retirement.
"This is made worse by the fact that many of members spend their retirement money too quickly," he said.
Another factor was the increasingly long retirement period, he said.
"When it was first set in 1951, the full withdrawal age for our funds of 55 years old was the same as the average Malaysian life expectancy then.
"Some 60 years on, the full withdrawal age has not changed but the life average expectancy of Malaysian has grown to 75 years," he said.
Malaysians today need to save for a 20-year retirement span as compared to a very short one 60 years ago.
Azlan also said the demand for healthcare for the aged is expected to rise significantly in the coming years based on projections by the United Nations (UN).
He said under the UN definition, the Malaysian population was ageing.
"We are now classified as an 'ageing' nation, with over seven per cent of our population aged 60 years and older," he said in his keynote address at the Malaysian Private Pension and Healthcare Conference 2011 here today.
Azlan said with old age medical expenses were expected to increase.
He said health spending in Malaysia has grown from RM9.8 billion in 2007 to RM12.2 billion last year while the federal government's health expenditure was expected to be RM13.2 billion.
"This rise is moving in synchrony with the ageing demographics of the country and with rising healthcare costs," he said.
Azlan said the demand for healthcare was so strong that the country now has 217 private hospitals when 30 years ago, there were just a handful.
He said EPF was cognizant of its members' needs and for those most urgent, it has provided withdrawal schemes from members' account two such as for housing, education and critical illnesses.
"Specifically for critical illness withdrawals, we have raised the number of critical illnesses eligible for withdrawal from 36 to 55," he said.
Azlan said for critical illnesses, the EPF has in the past three years seen steady amounts of withdrawals, from circa RM46 million in 2006 to around RM35 million last year for a total of RM220 million in these past five years.
"We note, with some satisfaction that these amounts have been falling, implying, among other things, the increased awareness of the importance of retirement savings despite the rise in medical costs," he said. - BERNAMA