The Employees Provident Fund (EPF) has announced that both employers’ and employees’ contribution will be aligned with the minimum wages of RM1,100 starting January 1, 2019.
This will be implemented for all members of the EPF in Peninsular Malaysia, Sabah, and Sarawak.
Currently, EPF statistics show that 1.64 out if 7.11 million active members of the EPF contribute less than the current minimum wage of RM1,000. That’s 64% of the total active members.
EPF added that the low contribution is one of the reasons why most of its members have lower retirement savings. This new plan will see monthly contributions for workers on a monthly salary to be at least RM264. However, workers who are on a weekly, hourly, or daily salary basis will be subject to a different set of plans.
“Low wages, particularly among low-income earners, is one of the primary causes (why) many Malaysian workers retire with insufficient funds. Alignment of the minimum wage should help EPF members achieve sufficient savings for their retirement and help strengthen their future financial resilience,” said EPF Chief Executive Officer Tunku Alizakri Alias.
“With the proven success of EPF’s Retirement Advisory Services for members, the fund will be providing free retirement advisory services for employers, including having dedicated officers to manage the employers’ relationship with EPF,” he added.
EPF also said that they have sent notices to all employers with regards to the new contribution plan. They will work closely with employers to ensure smooth implementation of the new plan.
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