EPF: Budget 2022 measures to spur economic recovery the key to rebuilding retirement savings

EPF: Budget 2022 measures to spur economic recovery the key to rebuilding retirement savings
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KUALA LUMPUR (Oct 29): The Employees Provident Fund (EPF) supports the government’s measures tabled in Budget 2022, which it sees as conducive towards fostering economic recovery, improving livelihoods, as well as spurring employment — all of which will pave the way for Malaysians to rebuild their retirement fund.

In a statement, the retirement fund said the government’s decision to extend the minimum statutory contribution rate for employees at 9% for another six months is a move that acknowledges the current economic challenges faced by members.

The extension, which can be opted out if members choose to, will take effect from January 2022 wages (February 2022 contribution) until June 2022 wages (July 2022 contribution), after which the minimum statutory contribution rate for employees returns to 11%.

“We are also grateful that the government has agreed to extend the age for i-Saraan members, as this can encourage more self-employed and informal sector workers to save for their retirement with the EPF.

“More so, self-employed and gig workers are also offered tax relief of up to RM4,000 when they contribute to the EPF via voluntary contributions. This is in line with our focus to get this group into the EPF scheme for their future retirement security,” said EPF chief executive officer Datuk Seri Amir Hamzah Azizan in a statement on Friday.

During the tabling of the Budget 2022 themed “Keluarga Malaysia, Makmur Sejahtera”, Minister of Finance Tengku Datuk Seri Zafrul Tengku Abdul Aziz announced that the government’s 15% contribution under i-Saraan, subject to a maximum of RM250 per member per year, will be extended to include those from age 55 to 60.

i-Saraan is a voluntary contribution programme with incentives for the self-employed and informal sector workers to save for their retirement. To date, there are 356,791 members registered under i-Saraan.

Meanwhile, the Caruman Sukarela Insentif Suri, or i-Suri, which enables housewives and widows to save with the EPF, will be integrated with the Social Security Organisation (SOCSO) and renamed "Kasih Suri Keluarga Malaysia".

The EPF noted that the initiative provides the opportunity for housewives and widows registered under the eKasih system to gain access to social security. eKasih is a national-level integrated database system on poor households to assist in the planning, implementation and monitoring of poverty eradication programmes.

Amir Hamzah said the EPF welcomes the social protection measures announced in Budget 2022, which include insurance, takaful, medical assistance, as well as expanding support to children and the elderly.

These efforts, he said, go some way towards addressing the shortcomings of the country’s social protection system for the vulnerable members of society, to ensure they have access to at least a minimum standard of living, even during unprecedented times.

“Given that our coverage extends to almost half of the Malaysian population, we will continue to work with the government and related agencies in achieving social wellbeing for EPF members and Malaysians at large, in a manner that is transparent, inclusive, and in line with the ‘Keluarga Malaysia’ spirit,” added Amir Hamzah.

KWAP hails fiscal relief measures

Meanwhile, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) said the civil service pension fund manager was encouraged by the government’s efforts to prioritise the rakyat through the continuation of policies that support people and businesses, including financial assistance and fiscal relief measures.

“We are indeed heartened by the government’s Budget 2022. As a nation, we must rise against the tide and support Keluarga Malaysia. It is clear that due to the impact of the pandemic, we have to implement meaningful solutions to support the economic recovery.

“As a major investor in Corporate Malaysia, we are [also] inspired by the fact that the environmental, social and governance (ESG) criteria are taking the centre stage to ensure companies step up to achieve best practices in this sphere,” said KWAP chief executive officer Nik Amlizan Mohamed in a statement. 

Towards this end, Nik Amlizan noted that within the ambit of ESG and promoting inclusivity, it is laudable that all companies listed on Bursa Malaysia will be required to appoint at least one woman to their board of directors.

See more Budget 2022 highlights here.

Tan Choe Choe & S Kanagaraju