KUALA LUMPUR, 12 October 2019:The Employees Provident Fund (EPF) notes that Budget 2020 takes into account fast-changing demographics, the changing definitions of work and the work environment, and the issues surrounding social well-being generally.
EPF Chief Executive Officer Tunku Alizakri Alias said, “The EPF is pleased some of the social concerns we have often raised have been heard by the Government and reflected in the budget with unique solutions to the unique issues pertaining to the well-being of Malaysians.”
The response to the Budget announcements related to the EPF are as follows:
“The EPF is honoured to be tasked with the administration of the [email protected] initiative, with the different @Work programmes aimed at providing employment opportunities for key segments of the Malaysian workforce as well as reducing our over-dependence on low-skilled foreign workers,” said Tunku Alizakri. “[email protected] is an important measure towards resolving critical talent issues in the country, such as low wages and high youth unemployment especially amongst new graduates as well as enabling a return to work programme for women. What is also unique is that the various initiatives also include employers to actively be part of the solution.”
The implementation of [email protected] will also ensure the beneficiaries to have their future retirement needs be taken care of as the incentives will be delivered via EPF channels. It is anticipated that part of the incentive will be immediately available to the recipients via a new withdrawal mechanism to be developed by EPF.”
“We also note that a lot of money and effort is being spent on training foreign workers, investment which will be lost when they return to their countries,” said Tunku Alizakri, adding that, “If these efforts were to be channeled to Malaysians, this will ensure that the people investments will be retained in the country for the long term. The [email protected] programme also enables the cost of hiring locals in key sectors to be cheaper than foreigners as employer’s EPF contributions for those individuals will be offset by the Government incentive offered.”
Expansion of Education Withdrawal
This proposal, which allows EPF members to make withdrawals to fund their education from the certificate level onwards, was made in view of the need to quickly up-skill Malaysians with new competencies and skillsets to address the demands of a changing workforce environment.
“The expansion of the education withdrawal facility under Account 2 to members’ spouses and parents, also looks to extend the productivity of EPF members’ families. Members can opt to financially support their spouses or parents to enroll in continuous learning programmes and ensure self-sufficiency beyond retirement,” Tunku Alizakri said.
Social Security Coverage for all Malaysians
The rise of the gig economy, a general preference for younger workers to opt into the informal workforce, and an increasing number of workers and professionals under Contract for Services has resulted in the growth of the working population falling outside the social security system.
According to Tunku Alizakri, “To address this matter, the EPF is looking to extend EPF coverage to this under-served segment. The collaboration withtheNational Film Development Corporation Malaysia (FINAS) to open this to the creative and performing arts industry, is definitely a good start.”
Contribution Programme for Spouses
Under this programme, the EPF provides an avenue for husbands to voluntarily transfer 2 per cent out of the minimum 11 per cent monthly EPF contribution into their wives’ EPF accounts.
“The EPF has always acknowledged women, irrespective of whether they have full-time careers or are housewives, as valuable and significant contributors to the economy. Women tend to shoulder the bigger part of the responsibility for care-giving duties in the family. Stable families improve productivity among workers, so wives should also enjoy some social security benefits,” said Tunku Alizakri.
Withdrawal for Subfertility treatment
Malaysia’s ageing population, caused by a continuous trend of falling fertility rates, is expected to bring about healthcare and employment challenges. One of the ways to address this matter includes encouraging couples to have more children through medical assistance – yet costs of such treatments are extremely high, with In-vitro Fertilisation (IVF) treatments ranging between RM4,000 to RM30,000 per cycle. Taking note of this, the EPF will be creating a new option under Account 2 for withdrawals for subfertility treatments.
Tunku Alizakri said that, “The EPF welcomes the opportunity to work closely with the Ministry of Women, Family and Community Development and the Ministry of Health in the proper implementation of this proposal. We recognise that children have direct and indirect benefits for families. Therefore the EPF is fully supportive, and will actively explore ways to balance the need between financial security and social well-being.”
On a final note, Tunku Alizakri commented that this year’s budget supports the provident fund’s mission of ensuring members achieve financial resilience on retirement.
“The various programmes related to the EPF are indeed a big responsibility. However, we take it as a privilege to be able to play our part in creating a better Malaysia. We will be working with the respective ministries and agencies to implement these programmes and will make announcements in due course on the details of the implementation,” he said.
The Employees Provident Fund (EPF) is Malaysia’s premier retirement savings fund to help its members achieve adequate savings for a comfortable retirement. This is in line with EPF’s vision to help members achieve a better future and the mission to safeguard members’ savings and deliver excellent services. The EPF has evolved significantly from transaction-centric to a professional fund management organisation with a strong focus on retirement security. The EPF is guided by a robust and professional governance framework when making investment decisions. It continues to play a catalytic role in the nation’s economic growth and seeks to cultivate a savings and investment culture among its members to improve the country’s financial literacy level.