GEORGE TOWN, Sept 26 – The majority of Employees’ Provident Fund (EPF) members in the Northern Region, covering the states of Perlis, Penang, Kedah and Perak, were found to not have sufficient basic savings of at least RM240,000 at the age of 55.
EPF Northern Region director Jeffary Mohamed Isa said, for example, Penang has 746,000 members, aged 55 or below, but only 27 per cent or 199,000 members, have reached the basic savings balance while another 547,000 (73 per cent) have not yet reached the basic savings balance.
“Financial sufficiency is important when they retire later. If they do not have enough money then they will face difficulties not only to support themselves but also their families,” he told reporters at a session with Penang media.
“What the EPF has set now is based on a basic savings of RM240,000 but it depends on the individual’s lifestyle as well as health conditions at that time, so they need to have more savings (than RM240,000).”
Basic savings is the amount of savings in a Retirement Account that is set according to age to enable members to earn savings of at least RM240,000 at the age of 55, and basic savings allows members to earn a minimum amount of RM1,000 per month to fund basic retirement needs when they retire later, for 20 years starting from the age of 55 to 75 years.
Jeffary said that not having a sufficient basic savings balance is one of the three main challenges facing his team in the Northern Region, in addition to the change in employment trends towards the informal sector and the still low participation rate of Muslim EPF members in Simpanan Shariah.
