EPF Chief Executive Officer Datuk Seri Amir Hamzah Azizan said the changing landscape further reinforced the need and urgency for Malaysia to adapt to current changes in order to safeguard Malaysians’ income security during old age. – Bernama photo
KUCHING (Feb 25): The Employees Provident Fund (EPF) was pleased that the Budget 2023, announced by the Prime Minister Datuk Seri Anwar Ibrahim yesterday, took into account the demographic changes resulting in an increasing number of ageing population as well as the significant shift in employment landscape from formal to informal employment.
EPF Chief Executive Officer Datuk Seri Amir Hamzah Azizan said the changing landscape further reinforced the need and urgency for Malaysia to adapt to current changes in order to safeguard Malaysians’ income security during old age.
“We are pleased that some of the concerns raised by the EPF, primarily on the critically low retirement savings and long-term financial wellbeing of Malaysians, were addressed in the budget.
“Budget 2023 is an inclusive budget and among others, it seeks to bring improvement to Malaysia’s social protection system. The government is taking concrete steps to pave the way for more reforms as well as strengthening the foundation for the development of a strong social wellbeing infrastructure,” he said.
The EPF’s response to the Budget 2023 announcements are as follows:
Government’s Contribution to EPF Account 1
The EPF welcomes the initiative by the Government to encourage EPF members with low savings and are nearing retirement age to continue to save and accelerate the accumulation of their retirement savings. The Government will allocate about RM1 billion to contribute RM500 on a one-off basis to approximately two (2) million members aged between 40 and under 55 with EPF savings of RM10,000 and below in their Account 1. The EPF will be taking on this initiative and further announcements regarding its implementation will be made in the near future.
Matching Contribution Incentive (i-Saraan)
The EPF thanks the Government for extending the i-Saraan programme for 2023 and increasing the maximum limit of the matching contribution incentive for 2023 from RM250 to RM300 per year. This initiative will benefit members under i-Saraan who are outside the formal sector, including housewives, and help accelerate their financial security for retirement.
Expanding the scope of annual tax relief for life insurance premiums or life takaful contributions to cover voluntary contributions to the EPF of up to RM3,000
The EPF welcomes the initiative to expand the scope of annual tax relief for life insurance premiums or life takaful contributions to cover voluntary contributions to the EPF of up to RM3,000. This initiative can be enjoyed by all workers, both in the formal or informal sector, who make voluntary contributions to the EPF. This means that a member who contributes compulsorily (tax relief up to RM4,000) and increases savings with voluntary contributions will be able to enjoy tax relief of up to RM7,000. This effort will encourage more Malaysians to increase their retirement savings for old age.
Enhancement of EPF Simpanan Konvensional (SK) and Simpanan Shariah (SS)
The EPF is enhancing its investment operations to ensure SS and SK are invested optimally to provide competitive returns to 15.7 million EPF members. The enhancement includes the implementation of an earlier effective date to become an SS member compared to the current policy in which the effective date is on an annual basis.
Amir said the wellbeing of Malaysians during their golden years remains a key priority and the EPF will support the implementation of these initiatives to catalyse the accumulation of retirement savings for EPF members, with a view to helping them achieve a dignified retirement.
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