Malaysia: EPF to align monthly contribution with new minimum wage order
KUALA LUMPUR: Beginning Jan 1, 2019, the minimum contribution of employees and employers to the Employees Provident Fund (EPF) will be aligned with the Minimum Wages Order (Amendment) 2018 of RM1,100 for both Peninsular Malaysia, and Sabah and Sarawak.
The EPF said a minimum contribution of RM264 was expected to be received from every worker who earned monthly wages, subjected to being employed for the full month, under the new measure.
Different minimum contribution may apply to members who are salaried on a weekly, daily or hourly basis.
The EPF said notices had been sent to all registered employers on this matter and it would work closely with employers to ensure the smooth implementation of the policy.
“Alignment of the minimum wage should help EPF members achieve sufficient savings for their retirement and help strengthen their future financial resilience,” said Chief Executive Officer Tunku Alizakri Alias in a statement on Thursday.
He said a total of 1.64 million, or 23%, of the 7.11 million active EPF members contributed less than the current minimum wage of RM1,000.
Statistics from the EPF showed that 64% of members who reached the age of 54 have savings below RM50,000, which is a meagre sum when taking into account the rising cost of living and household debt.
Tunku Alizakri said low wages, particularly among low-income earners, was one of the primary causes why many Malaysian workers retired with insufficient funds.
“With the proven success of EPF’s Retirement Advisory Services for members, the provident fund will be providing free retirement advisory services for employers, including having dedicated officers to manage the employers’ relationship with EPF,” he added. – Bernama