Former EPF Chief Urges Graduated Contribution System for Workers

KUALA LUMPUR — A former leader of the Employees Provident Fund (EPF) has put forward a proposal to reform Malaysia's mandatory retirement savings system through a tiered contribution model that would benefit lower-wage employees.

The proposal suggests that employers increase their EPF contributions for workers earning lower salaries, while simultaneously reducing contribution rates for higher-income staff. Advocates argue the approach would enable lower-wage workers to accumulate greater retirement savings without placing additional financial strain on individual contributors.

The restructured contribution framework is designed to address growing concerns about retirement adequacy among Malaysia's lower-income workforce. Workers in entry-level and semi-skilled positions typically struggle to build sufficient savings through conventional contribution arrangements, raising questions about their financial security in retirement.

The recommendation represents one of several policy suggestions under consideration as policymakers examine ways to strengthen Malaysia's retirement system. Any changes to EPF contribution structures would require approval from the government and relevant regulatory authorities.

The proposal adds to ongoing debate in Malaysia about pension adequacy and the most effective mechanisms for ensuring workers across all income levels can achieve adequate retirement provisions.