Retirement systems and pension reform: A Malaysian perspective

Abstract

This paper reviews and assesses emerging issues in retirement systems and pension reform in Malaysia. The pension system models proposed by the ILO, the World Bank and the Geneva Association are compared and analysed, providing a useful conceptual framework for the design and reform of pension systems. This framework is then used to assess pension reforms in Malaysia, analysing the relative advantages and disadvantages for workers. The authors conclude by proposing a number of recommendations for retirement system design and reform. T he retirement system is of crucial importance to the labour force and to organizations. It involves a process that starts at the beginning of an individual's career and extends throughout his or her working life and retirement. One important component of retirement systems is the choice of pension scheme -a matter that has become increasingly complex, while desirable options available to employees become increasingly restricted. People are made aware of pensions as early as in their teens: when Furnham and Goletto-Tankel (2002) surveyed a sample of British young people aged between 16 and 21 on their knowledge of, and attitudes towards, savings, pensions and life insurance, they found varying degrees of awareness and understanding of pensions. Replies from respondents ranged from "a job with an organizational pension is important to me" to "private pensions are necessary if you want a good quality of life in old age". Retirement systems, and studies on this subject, therefore, continue to attract extensive attention from employers, employees, researchers and governments alike.

Retirement Schemes, its Challenges and Ways of Reformation: A Cross-Border Study

“…All public servants are entitled to receive pension income after retirement which designed according to defined benefit (Civil Service Pension) (Tolos et al, 2014). Employment Provident Fund (EPF) is the full-funded retirement scheme that designed by defined contribution for all individual employee in the private sector which is compulsory national saving scheme (Allianz Global Investors, 2019;Tolos et al, 2014).…”

“…All public servants are entitled to receive pension income after retirement which designed according to defined benefit (Civil Service Pension) (Tolos et al, 2014). Employment Provident Fund (EPF) is the full-funded retirement scheme that designed by defined contribution for all individual employee in the private sector which is compulsory national saving scheme (Allianz Global Investors, 2019;Tolos et al, 2014). EPF covers all private sector employees and non-pensionable public sector employees and also allow participants to withdraw some benefits for some specific segments such as education, house loans and health expenses (Allianz Global Investors, 2019; Say, 2018).…”

“…As a result, policy makers should take steps to reform retirement scheme to secured future financial situation ahead of ageing population (Economic Outlook, 2019;Tolos et al, 2014). According to mercer, Malaysian retirement system can be improved through taking several steps, such as; a) enhancing support level for poor elderly individuals, b) increasing household savings and decreasing household debt, c) retirement benefit should be taken as income stream, d) and expanding retirement age as life expectancy is growing (Say, 2018).…”

Poverty and Income Replacement Profile Among EPF Retiree in Malaysia

“…SOCSO implements two schemes, namely the Employment Injury Insurance Scheme and the Invalidity Pension Scheme (Tolos et al 2014). SOCSO is carrying out its responsibility by three key principles, namely solidarity fund, replacement income, and equality.…”

Challenges and Perspectives of Development of Private Pension Funds in Serbia

“…These three pillars The World Bank proposed in its report "Averting the old-age crisis", 1994, proposing the basic concepts and principles of model implementation. After that, her attention was focused on individual solutions adapted to the different conditions and needs of countries with different structure of the population (Tolos, Wang, Zhang & Shand, 2014). Additionally, although the EU does not elaborate a unitary approach for all member states since about 2000, the Commission has implemented the multi-pillar approach of the World Bank.…”