KUALA LUMPUR: Measures such as a new social pension plan, tax breaks and a reassessment of Employees Provident Fund (EPF) contribution rates for different income brackets are necessary if more Malaysians are to meet the new retirement savings benchmarks.
Experts believe that failure to do so could lead to a retirement savings crisis in the future, especially in light of Malaysia's ageing population.
Universiti Putra Malaysia's School of Business and Economics dean, Professor Dr Bany Ariffin Amin Noordin, said policies such as tax breaks and educational campaigns could help Malaysians hit the new benchmarks.
"Tax breaks can help those saving up for retirement, while educational campaigns can teach them about the importance of savings.
"Employers, too, can help by allowing employees to have a second job or flexible working hours so they can do part-time jobs to obtain more savings," he said.
Economist Professor Dr Geoffrey Williams said the government must introduce a new social pension plan to supplement the Retirement Income Adequacy (RIA) framework as there are seven million working-age individuals outside the workforce and millions who work but have no savings.
"The RIA alone will not solve it because it only applies to EPF members and requires discipline and commitment from an early age.
"The striking feature is that the required savings show how difficult it will be for millions of people to achieve the target. For example, if you have no savings now and are 40 years old, you will struggle to reach the required RM390,000."
Universiti Malaysia Kelantan's Entrepreneurship and Business Faculty deputy vice-chancellor, Professor Datuk Dr Nik Maheran Nik Muhammad, said increasing the i-Saraan annual incentive cap and expanding the i-Suri programme would be a good start.
"Reassessing EPF contribution rates for different income brackets could ensure more equitable savings accumulation, and finally encouraging employers to offer pension matching or supplemental retirement benefits can aid employees."
UCSI University Malaysia Associate Professor of Finance Dr Liew Chee Yoong said the government must form an expert committee to plan for the implementation of a Universal Basic Income in the future to mitigate a retirement savings crisis.
"Actually, the recommended benchmark for a comfortable retirement life is RM600,000 and not RM390,000. Given this situation, many retirees will rely on additional income sources such as part-time jobs, family support or government assistance to sustain their post-retirement years.
"By 2050, nearly one in four Malaysians will be 65 and older. Given that the Malaysian population is ageing rapidly, the urgency of having sufficient retirement savings to lead a comfortable life can no longer be ignored," he added.