Close to half of Malaysian workers are not covered by any retirement scheme because there is a lack of a comprehensive social protection system.
This 44% consists of over six million people who are self-employed or in the semi-formal sector.
Tunku Alizakri Alias, the deputy chief executive officer (Strategy) of Employees Provident Fund (EPF) said, currently only 46% of the workforce are covered by the EPF, while 10% are under the pension scheme. The remaining 44% are left out.
“We are a bit worried even if they (the 44%) must know what they are doing.
“In terms of financial literacy, they must try and upscale themselves as fast as possible,” Tunku Alizakri was quoted by The Star Online.
He also encouraged those who need help to approach Bank Negara or the EPF’s retirement advisory services.
“It’s free but they need to be as open as possible, just like going for a medical health check,” he added.
Retirement planning is important. All employees should identify what they wanted for retirement and plan for it accordingly, he advised.
He said all employees should know what they wanted for retirement and prepare for it accordingly.
Datuk Shahril Ridza Ridzuan, EPF chief executive officer, said, getting the semi-formal sector employees to contribute to their retirement is a challenging policy issue because they are clueless on how to provide for themselves and for retirement.
“It’s essentially how to force people to contribute to their future wellbeing.”
This issue and the trend of young people who are increasingly uninterested in traditional jobs, will be tackled in next year’s social security conference, he added.
“This is a key issue not only for Malaysia but also for other countries that grapple with this challenge,” he said.