POLICY PERSPECTIVE: STRUCTURAL REFORMS ON SUSTAINABLE RETIREMENT AND SOCIAL PROTECTION FOR THE AGEING POPULATION IN MALAYSIA
Farah Shazwani Mohd Taib,
Strategic Evaluation Leadership Program,
Evaluation Program & Potential INTAN, Bukit Kiara
DOI:
Keywords:
Retirement, Retirement Planning, Social Protection, Ageing Population, Financial Literacy, EPF, Pension
Abstract
Malaysia will become an ageing nation by 2040 and a “super-aged” nation by 2060, with an estimated 14 percent and 20 percent of the total population age 65 and older, respectively. Old age is synonymous with high dependency, vulnerability, deteriorating income and health, as well as reliance on social support. Reaching old age is inevitable, but proper retirement planning earlier in life determines one's future upon reaching old age. By international standards, Malaysia’s current retirement and social protection provisions are still low, featuring a huge gap in income level among older persons. The tax-funded assistance, which covers only 9.1 percent of the total ageing population, is barely enough to cater for their basic necessities. Furthermore, about 61 percent of the ageing population is not entitled to any sort of assistance from the Government, nor do they have EPF or a pension to sustain themselves for the rest of their lives. On the other hand, the EPF system covering the private sector and the Pension Scheme for civil servants are not sustainable for certain individuals as well as for the nation, as will be discussed further in this paper. This paper examines the issues of retirement management and social protection for the ageing population in Malaysia and identifies ways for structural reforms toward sustainable retirement and social protection in the future. With national solidarity, priorities should be set to ensure that ageing is an achievement that can be cherished by all humanity.
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