The employees in the private sector in Malaysia may be able to leverage their EPF (Employee Provident Fund) contribution to become a pension scheme tool.
What this means is that, instead of getting their accumulated saving in lump sum upon retirement, they can choose to be paid on monthly basis until all their EPF savings are all utilized.
The government will be sitting down for discussion with the EPF and related authorities to work out the exact mechanism and study the feasibility of such exercise in the near future. Once regulated, the Ministry of Finance is said to be handed the job of implementing the newly introduced system.
According to the HR Minister, Datuk Dr S Subramaniam, many EPF contributors were found to have used up their savings within a short two years, and this raise concerns of their welfare as they are entering the golden years.
At the moment, pension scheme in Malaysia is enjoyed mostly by the civil servants serving the government. Some of them have also been contributing for EPF but the government has recently given an option for them to switch back to pension scheme. On the other hand, non-pensionable employees, together with their employers are obligated to contribute to EPF account.