Harapan Moots Third Party EPF Contributions To Avoid Retirement Poverty

PH’s plans for aged care includes an agency or department for older persons and an elderly protection scheme under Socso.

KLANG, Nov 2 – Pakatan Harapan’s (PH) election manifesto today unveiled plans for aged care, including proposals to allow third-party contributions to the Employees’ Provident Fund (EFP) that would further facilitate the accumulation of funds for retirement.

The coalition’s 15th general election pledge titled “Kita Boleh! Harapan GE15 Action Plan” mooted to expand EPF’s existing i-Saraan scheme to allow third-party contributions that would encourage parents to save up for their children at an earlier age.

“To avoid a retirement poverty crisis (85 per cent of the elderly are in the bottom 60 per cent income category), early intervention must be implemented to accrue more funds for retirement. 

“We can implement automatic registration for EPF regardless of age, expanding i-Saraan including a starting incentive for first time voluntary contributions and allowing third party contributions to encourage parents to start saving up for their children at an earlier age.”

The current i-Saraan scheme allows EPF members who are self-employed and do not earn a regular income to make voluntary contributions towards their retirement. The scheme also allows members to receive an additional 15 per cent annual government contribution. The added incentive is given from 2018 until 2022.

The 94-page manifesto also included plans to establish an older persons department or agency that would focus on solving the group’s issues and safeguarding their welfare. Elderly care is currently a division under the Social Welfare Department (JKM). 

PH also proposed to reconfigure the Social Security Organisation (Socso) to include an Elderly Protection Scheme that would provide a retirement safety net for senior citizens. However, the plan did not include a proposed contribution rate.

The proposal comes amid reports that more than half of EPF’s nearly 13 million members aged under 55 had savings of less than RM10,000. An estimated RM145 billion in EPF fund withdrawals were made due to Covid-19.

Aged care was addressed directly under two key manifesto items – a humane economy and comfortable old age living – covering plans to professionalise the caregiving sector and to institutionalise assistance and an allowance for caregivers, as highlighted previously by former state representative Howard Lee Chuan How.

Lee, a central executive committee member of the DAP, is running for Parliament for the first time — in Ipoh Timor, a DAP stronghold.

PH is also proposing incentives for employers to train and hire senior citizens and for local development plans to have elderly activity or day centres.

Other “elderly-friendly” provisions include mobile care service, free public transportation for the elderly, shopping vouchers, funeral coverage, and automatic citizenship for elderly citizens who have at least one child with Malaysian citizenship. 

PH is also planning to enact a Senior Citizens Act and an active ageing policy though details of these proposals were not included.

“Demand for caregiving will definitely skyrocket as the percentage of elderly population rises. Harapan is always planning ahead and we will invest public funds and encourage private investments into the service sector, caregiving infrastructure, and forging social security systems which are more inclusive and comprehensive. 

“We can prepare ourselves to face the reality of being an aged society by implementing the National Care Economy and Ageing Community Preparedness Plan – SiagaJaga.”

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