Very Few Malaysians Can Afford To Retire. What Went Wrong? | Insight | Full Episode

Summary

The CNA Insider episode delves into Malaysia's impending retirement crisis, highlighting how the COVID-19 pandemic exacerbated financial insecurity among its citizens. With high living costs and stagnant incomes, many Malaysians emptied their pension funds during the pandemic. The majority now have insufficient savings for retirement, posing a significant social and economic challenge. The government is under pressure to either protect long-term financial health or offer immediate relief, but the harsh reality remains—many Malaysians cannot afford to retire.

Highlights

• Pandemic-driven pension withdrawals have depleted funds for many Malaysians. 😟
• Many struggle with high living costs, stagnating wages, and inadequate retirement savings. 🔄
• EPF withdrawals allowed during COVID-19 provided temporary relief but left long-term impacts. 🕰️
• Political maneuvers exploited pension withdrawals to gain favor during hard times. ✨
• Efforts underway to rebuild retirement savings amidst growing elderly poverty. ⏳

Key Takeaways

• COVID-19 pandemic led many Malaysians to empty their pension funds, leaving a retirement crisis looming. 🚨
• High cost of living and low wages have made it difficult for Malaysians to save for retirement. 💰
• Government allowed multiple withdrawals from pension funds during the pandemic, sparking debate over its impact. 💬
• Political decisions during the pandemic prioritized short-term relief over long-term financial security. 🏦
• A growing portion of Malaysians face poverty in old age without adequate retirement funds. 📉

Overview

The video explores Malaysia's dire retirement landscape, made worse by COVID-19. Many Malaysians have found themselves with emptied pension accounts, unable to face the reality of retiring without proper savings. The issue began when successive governments permitted withdrawals from the Employees Provident Fund (EPF) during the pandemic, initially a lifeline for many, but this accessibility left long-term financial gaps.

As living costs rise, saving for retirement becomes increasingly challenging. The video captures the dilemma Malaysians face—should they tap into their remaining funds or find alternative financial strategies? Meanwhile, the government grapples with balancing immediate economic relief and safeguarding future financial security. Malaysia's low-income workers, already stretched thin, are particularly vulnerable.

Efforts to address these rising challenges involve policy debates around EPF, retirement age adjustments, and income support. However, if no significant measures are taken soon, Malaysia may face a widespread retirement crisis impacting future generations. Viewers are left pondering the effectiveness of current policies and whether Malaysia can avert a social and economic crisis as its population ages.

Chapters

• 00:00 - 00:30: Introduction and State Elections The chapter discusses the August state assembly elections held in six Malaysian states, focusing on key issues affecting voters. It highlights the bread-and-butter concerns faced by citizens, particularly in the wake of job losses and economic hardships caused by the COVID-19 pandemic. Many people, like the speaker who lost their job, have struggled as the main financial support for their families. The prior government's response to these challenges included permitting Malaysians to access their pension funds, but the recovery is expected to be slow.
• 00:30 - 10:00: Retirement Crisis and Pension Fund Withdrawals The chapter discusses a growing retirement crisis in Malaysia characterized by the rapid depletion of pension funds. Millions have exhausted their pensions leaving many with almost nothing to live on. It highlights the dire situation where one in two individuals has only 200 per month to survive, prompting concerns about the possibility of salvaging depleted pension funds.
• 10:00 - 20:00: Impact on Individual Malaysians The chapter 'Impact on Individual Malaysians' opens by introducing Norlan Ismile, a 49-year-old taxi driver and father of five. Usually busy driving his cab, Norlan embarked on a significant journey on foot from his hometown of Jeor to the National Palace in March of the same year. The narrative likely elaborates on his motivations and the broader context of his actions, which are emblematic of the chapter's focus on personal experiences and impacts felt by Malaysians.
• 20:00 - 30:00: Debate on EPF Withdrawals as a Solution A man named Qualo undertakes a 312 km walk over six days to deliver a message to the Sultan, urging the country's lawmakers to address the financial struggles of citizens like him. His main request is for the government to allow withdrawals from the Employees Provident Fund (EPF), Malaysia's compulsory pension scheme, as a form of financial aid.
• 30:00 - 40:00: Challenges and Economic Recovery The chapter titled 'Challenges and Economic Recovery' delves into the various obstacles faced during economic recovery phases. It highlights the complexities of overcoming financial downturns and the strategies implemented to revive the economy. The discussion focuses on policy measures, governmental interventions, and the critical roles played by different sectors in stabilizing the financial system and promoting growth. Lessons learned from past recoveries are explored, providing insights into sustainable economic development.
• 40:00 - 50:00: Saving for Retirement and Structural Issues The chapter discusses the rising living costs in Malaysia, mirroring a global trend. In the context of Malaysia's State Assembly elections in August, the cost of living was a major concern for voters. A survey focusing on Malay voters in states like Tanu, Kalantan, Panang, and Kadada highlighted that the electorate felt particularly burdened by economic pressures.
• 50:00 - 60:00: Government Policies and Future Directions This chapter discusses the topic of government policies and future directions, focusing on the issue of the cost of living. It notes that while living costs are still high compared to prior years, government interventions have somewhat mitigated these increases. However, the impact of these measures may not be immediately apparent or universally felt across individuals. The chapter acknowledges the complexity in evaluating these policy measures due to their relative nature and individual perceptions.
• 60:00 - 70:00: Conclusion and Final Thoughts The chapter addresses the current economic concerns faced by many voters post-pandemic. It highlights that many have lost their jobs and transitioned to different forms of employment, including microenterprises and gig economy roles. This shift has resulted in a higher cost of living without a corresponding increase in income, leading to a more precarious employment situation with an average income of around 80 ringgits, or $17 USD, per day.

Very Few Malaysians Can Afford To Retire. What Went Wrong? | Insight | Full Episode Transcription

• 00:00 - 00:30 in August six Malaysian States held their State Assembly elections one major issue for voters bread and butter I lost my job so yeah I was quite sad because I'm the pillar of the family during coid a lot of savings were wiped out so the recovery period will take longer previous government's solution was to allow Malaysians to tap into their Pension funds
• 00:30 - 01:00 but for many this Lifeline has quickly vanished millions of people have wiped out their pensions and they have nothing left one in two has only 200 per month to live until they die is Malaysia staring at a retirement crisis and can their depleted Pension funds be saved that time B is taking
• 01:00 - 01:30 49 year old norlan ismile can usually be found behind the wheels of his taxi cab but in March this year the father of five set off on foot from his hometown in jeor to the National Palace in
• 01:30 - 02:00 qualo he walked 312 km over six days to deliver a message to the sultan to tell the country's lawmakers to hear the cries of people like him in need of financial help what he wanted was for the government to release monies from the employees Provident fund Malaysia's compulsory pension
• 02:00 - 02:30 system
• 02:30 - 03:00 living costs in Malaysia like elsewhere in the world have gone up when the country held its important State Assembly elections this August cost of living was foremost on voters Minds one survey found that Malay voters in the states of tanu kalantan panang and kadada were overwhelmed inly
• 03:00 - 03:30 concerned about the cost of living compared to issues like corruption race or religion in terms of cost of living of course they're still high relative to years back but the inre the increase of the costs uh have been mitigated by some of the measures by the government but of course A lot of these things are not something that you can feel directly especially when you are comparing to something that's relative from one person to another so so what's happening
• 03:30 - 04:00 right now is that people are saying that economics issue is a big concern for a lot of Voters many of them lost their job during the pandemic and they're now in different types of employment and some of them have set up microenterprises or the in the gig economy so when you have all of that uh it means that the cost of living is much higher your income hasn't increased and your employment situation is more precarious with an average income of around 80 ringot or or $17 usar a day
• 04:00 - 04:30 noran found it tough to support his large family
• 04:30 - 05:00 the struggles of ordinary Malaysians come in the wake of the coid pandemic which hit the country hard a few months into 2020 unemployment Rose above 5% the highest in three decades Muhammad nazri Mo found himself among those statistics the former group assistant director of a hotel chain lost his livelihood Hood when the virus swept
• 05:00 - 05:30 the country and tourism vanished I would say I'm quite uh sad actually and then uh don't know what to do actually because uh you can't go anywhere I mean with my age that time uh I hit 50 uh to join uh Workforce in Malaysia especially in quala Loa is quite hard you know I send resumés my CVS I think more than 100 companies and then even I
• 05:30 - 06:00 attended few job fairs and then not successful at 50 ndri would have been eligible to withdraw funds from his pension the employees Provident fund or EPF this is a compulsory savings scheme with most employees setting aside 11% of their salary while employers contribute another 12 to 13
• 06:00 - 06:30 % the EPF is divided into two accounts account one is meant for retirement while account two can be used in some cases like for housing or education ordinarily These funds are locked till workers reach the partial Redemption age of 50 or full Redemption at 55 but during coid then prime minister midin Yasin leader of the
• 06:30 - 07:00 parata national government allowed a special dispensation for workers to dip into their EPF to cushion the impact of the pandemic nadri took advantage of this withdrawing $5,500 Us in total I used the money specifically for I mean for the business part of it and then some of it I used for daily use so uh we uh ended up
• 07:00 - 07:30 selling a Indonesian uh dessert uh called Estell and then uh one famous Thai uh street food kabu Mei tomyam something like that yeah so it was an instant heat because uh we we didn't compete with other vendors uh next to us it was a good start for us but what's started as a one-off
• 07:30 - 08:00 withdrawal became insufficient as the pandemic wore on and so between 2020 and 2022 the governments under midin and his successor ismal Sabri sanctioned three more EPF withdrawals during prata Nationals time under M Yin the decision to allow for EPF withdrawals was a popular one especially among the masses so prime
• 08:00 - 08:30 minister former prime minister M Yassin then really capitalized on that situation and used it to his political gains and he remains to be a popular figure despite being the opposition now but by 2023 neither muhidin Yassin nor isal Sabri was in charge after the 15th general election a Unity government led by prime minister anoir Ibrahim came to power then in February this year midin now in
• 08:30 - 09:00 opposition urged the current government for one more round of EPF withdrawals but there was one problem for many the EPF well is running dry if you ask an individual did you benefit from it and some will say yes because I withdrew everything I possibly could so after the first round there were millions of people who had already wiped out their funds and then the next
• 09:00 - 09:30 time more people took out and the next time more people took so when it came to the final one it was only actually the most wealthy people who had any money left prime minister anoai Ibrahim vetoed another round of withdrawals it was revealed that at the end of last year 51% of those 55 or under roughly 6.7 million people had less than 10,000 Malaysian ringot or
• 09:30 - 10:00 $2,100 in their accounts if you take those about to retire now one in two have less than 50,000 which means from withdrawal age until you die you can use about 200 ring a month our poverty line is about 200 uh 2002 2005 it's it doesn't it doesn't make any sense further data revealed the depths of Malaysia retirement crisis as many as
• 10:00 - 10:30 30% of contributors have emptied their basic savings account and only 4% of Malaysians can afford to retire according to EPF officials I think it's a reality today to be honest I think that some of our members do fall into poverty um at retirement or even before retirement because they don't have the capacity to um continue to generate the kind of income they need it I think it is
• 10:30 - 11:00 reasonable to say that the pension crisis is here now it's not something for the future it's happening now and that's why it's important that we start to look at it however despite the worrisome state of the EPF calls to allow for more withdrawals are growing louder the reason inflation has ballooned the cost of living from 2.5% in 2021 the inflation rate increased to 3.3% last year then to
• 11:00 - 11:30 3.7% in January this year and in terms of purchasing power actually slightly more more difficult because one prices has gone 2020 to 2022 because crude price with the period has doubled gas price increased by about six times grain prices also has uh has increased now struggling Malaysians want the authorities to help according to one
• 11:30 - 12:00 survey over 60% of respondents said the government hasn't done enough to address the High Cost of Living this leaves the government with a quandry resist calls to draw on the EPF further to protect long-term Financial Health or succumb to the pressure of a quick fix because we are having issues with income not being enough not increasing in tandem with inflation rate and a lot of jobs quality
• 12:00 - 12:30 jobs are not easily available for malians and people who are outside of the urban areas might not necessarily have the accessibility to good jobs with good income so these are structural issues but a lot of these issues are always frame with an racialized narrative and that's what has been capitalized by politicians to G votes from voters especially from the Malay Community now
• 12:30 - 13:00 with more than $12,000 us still in his account norlan had hoped his stunt would spur the government to allow for another round of withdrawals
• 13:00 - 13:30 [Music] the government has fended off calls to release EPF funds but the episode has raised some important questions were the previous allowances to draw down on EPF the right move or has it created Al looming retirement Time
• 13:30 - 14:00 [Music] Bomb almost every day from 10:00 a.m. till late 30-year-old Suk vinder Singh travels across the capital city kour on his motorbike his job to deliver Parcels to officers and res residences within a
• 14:00 - 14:30 10 km radius compared to 3 years ago he can breathe a little easier nowadays there are more Parcels to deliver and therefore more money to be made a sign that the economy is recovering from the pandemic so vinder makes up to 5,000 Malaysian ringot or over $1,000 us a month enough to support himself and his elderly parents a stock contrast to the difficult days of coid
• 14:30 - 15:00 restrictions known as the pkp it's so hot I I have to curfew can we cannot go anywhere pkp cannot do anything sometime we don't have work so if we have uh company is open and then we can start our our job only can get our own uh money pocket money so vendor had never made any contributions to the EPF before EPF is only applicable to civil servants and
• 15:00 - 15:30 those formerly employed in the private sector gig workers and freelances are exempt though they can pay into a voluntary scheme we have about 1.6 million civil servants that falls under the uh government pension system uh the rest of the workforce which is roughly around 14.5 million um a little over half actually contribute regularly to EPF the other half don't uh so we have a situation where
• 15:30 - 16:00 you might contribute for 3 or four or 5 years then you switch jobs into something that doesn't require you to contribute and then you miss uh quite a considerable chunk of your uh um um income that that could have been saved so for Suk vinder where making ends meat is already a challenge planning for retirement is sometimes a bridge too far that time was worried but but what to do
• 16:00 - 16:30 we cannot do anything I maybe that time I don't have enough money to put money in the EPF and for those like Su vinda who don't contribute regularly or others who depleted their EPF accounts during the draw Downs There's an opportunity cost they miss out on the sizable interest that the government pays into EPF savings earned through Investments so far EPF T historical returns it has
• 16:30 - 17:00 been giving around 6% a year yeah even when the market was bad it was about 6% uh a year like that so I would say that is pretty amazing so what kind of investment out there in the market that doesn't have the risk of losing money can give you about 6% return I think you ask any fund manager you ask any and professional in money they'll tell you it's a it's a good investment if you're looking at that range of return for members who have money in their accounts
• 17:00 - 17:30 it's one of the best investments that you can make for members who don't have any money in their account it's it's not working for them by withdrawing early from the EPF it's a case of the poor becoming poorer yet coid 19 posed extenuating circumstances the economy contracted 5.5% over 30,000 small and medium ENT prises ormes were forced to shut down
• 17:30 - 18:00 unemployment Rose above 5% around 580,000 households which previously were in the middle inome category known as M40 slipped into the b40 group b40 is the bottom 40% of the population Malaysia's poverty rate also recorded a spike from 5.6% into 2019 to
• 18:00 - 18:30 88.4% in 2020 so while GDP you can say GDP has improved that is very good but it's not yet translated to the well-being of the people because unemployment has not yet recovered uh poverty has not yet recovered the growth is not yet inclusive it was under these conditions that then prime minister midin Yasin allowed EPF members to dip into their retirement savings to help ease their
• 18:30 - 19:00 financial hardship the first such withdrawal was made in April 2020 under a scheme known as I leari all EPF contributors under the age of 55 could tap up to 500 Malaysian ringot per month over a period of 12 months in February 2021 the facility was further extended in the form of I Sinar
• 19:00 - 19:30 members could withdraw up to 10,000 Malaysian ringot if they had 100,000 ringot in their savings the maximum withdrawal amount allowed was 6,000 Malaysian ringot if they had 800,000 in June 2021 it was extended again the new I chitra facility allowed up to a maximum of 5,000 Malaysian
• 19:30 - 20:00 ringot then in April of 2022 EPF members were again allowed to withdraw from their account in total Malaysians were allowed to withdraw from their EPF four times now with the pandemic in the rearview mirror some question if unlocking the EPF was the right move critical time requires critical action I don't disagree with uh what um
• 20:00 - 20:30 ever decision that that have been made by muin and is Sabri uh because given the depleted uh resources that the country had during that time to assist the needy people maybe this is uh one of one of the option to tap on EPF savings to elevate their situation um at that critical juncture it came down to survival of course you know you're going to have money when you retire but if you cannot survive at the moment because you
• 20:30 - 21:00 can't eat you know that's that's probably more critical problem that you have you know at that particular time so it was necessary
• 21:00 - 21:30 yet others looked on the decision more harshly it was a disastrous move in my opinion if you allowed them to withdraw they would wipe out their savings and then they would have no savings for their pension Dr Muhammad Abdul Khaled was the economic advisor to the former prime minister Dr mahat Muhammad during his
• 21:30 - 22:00 second tenure in office he didn't mince words on his critique During the period a lot of people no jobs no money what should have been done instead of asking the right to withdraw from EPF which is for retirement the government should give cash it's not to ask people you take from your uh from your saving it is irres irresponsible I would say the policy to us withdraw from EPF is the worst policy ever the
• 22:00 - 22:30 country has announced and implemented since Independence it is irresponsible the minister should go to jail to be fair the government did provide Aid to tied the economy through coid 530 billion ringot was allocated across eight stimulus packages between 2020 and 2021 but as the pandemic wore on the government too ran low on
• 22:30 - 23:00 resources after uh so many scandals uh including 1mdb Fiasco that happened uh the country financials have been severely depleted so given pandemic uh and during that time political uncertainty I don't think the government will be able to raise uh enough money at a reasonable rate so um that's why they make the decision uh use your own money to to to to save save yourself but at that particular time I think the
• 23:00 - 23:30 government also has problem financially the economy was not moving there was lock down there's no you know money going around the economy was kind of like uh stuck at a particular time so for government to help the people the the people back then they were in trouble too and this is really quite important to remember it's not the government's money in the EPF it's people's own money so they had to use their own money to look after themselves during the lockdown um because the government was not giving them
• 23:30 - 24:00 sufficient Direct Cash transfers to be clear the EPF isn't running out of money its overall balance sheet remains healthy rather it is individual members on the lower rung of the economic ladder that are facing the crunch the asset size didn't actually dip uh over these Co over the coid years so we started at just under 1 trillion and we ended 2022 it's just around 1 trillion ring uh this year obviously we
• 24:00 - 24:30 saw a lot of growth uh but um again it wasn't a financial problem for EPF itself it's the impact was more about uh the savings for our members I think especially for the those in the lower lower ranks we still have roughly about um uh half the membership below 10,000 ring so what the pandemic exposed was a much larger issue Malaysians just weren't saving enough even before coid
• 24:30 - 25:00 some had warned that the EPF contribution rate was too low before coid we already have this issue the cracks already there we are becoming more aging uh not many people have savings but our policy duing coid make things much worse that support system has gone missing uh the family system has started to break down because people are having less and less children uh uh so we're starting to see that that first
• 25:00 - 25:30 wave of people who are having trouble in retirement really coming through do this one here a financial plan returned YouTuber Peter Yong is the founder of Mr Money TV a financial education Channel he explains what the retirement figures are like for the average Malaysian the official figure is 250,000 in EPF in order for you to retire yeah but that doesn't take into account your other expenses so I would say that
• 25:30 - 26:00 you're are looking at the 20 years after retirement and a very Thrifty retirement lifestyle uh I would say 300,000 to 350,000 should be the amount that you minimally must have so assuming today if you're 30 years old and you're earning about 2,500 ring a month and you plan to retire at 60 so assuming after retirement you're going to live for another 30 years until 90 years old and during that time your expens is going to be 1,500 ring a month
• 26:00 - 26:30 based on today's standard so after you taking into account to inflation you will actually need 1.1 million 1.14 3363 to actually retire therefore you still need to save about 275.000 every month right now now once you but many Malaysians are nowhere close to this number I think most Malaysians actually don't save recently there was a survey report done by ring plus it says that 70% of Malaysian
• 26:30 - 27:00 actually save less than 500 ring a month yeah and about 60% of Malaysians actually are living on paycheck to paycheck for su vinder he has started to put money into his EPF account voluntarily his Target is 30% of his income but it has been a struggle as expenses continue to rise uh the things are get is getting more expensive than before that La so everything think all the price already went
• 27:00 - 27:30 up uh food price rental expenses oil for now we can afford but in future we're not sure we're not sure that we can afford is there a way to save the [Music] EPF [Music]
• 27:30 - 28:00 before he became a taxi driver naslan worked as a chauffeur and bodyguard he made a comfortable living bringing home 8,000 ringot or $1,600 each month but due to poor financial planning he didn't squirrel much income [Music] away
• 28:00 - 28:30 it has been some months since norlan made his sixday journey by foot to protest the freeze on EPF monies Salam
• 28:30 - 29:00 [Music] other than a few blisters he gained little else the government didn't acques to another round of vpf withdrawal citing the improving economic conditions I think it's a big no and employment rate is at the lowest now compared to during pandemic is now Hing
• 29:00 - 29:30 at about 3ish per which I think is really not extremely difficult for you to find a job and why result to getting your savings when actually you can yeah try to look for a job and government is also giving other support by means of uh cash transfer also giving some other aids to assist people via Rama initiative and so now is really time to save for our future and it's really time
• 29:30 - 30:00 to readjust our lifestyle to make sure uh you can have a decent retirement life later in 2022 Malaysia's GDP grew by a healthy 8.7% signs of recovery are everywhere including the live entertainment scene I have a big piece of news to share with you guys over the lockdown period I managed to score
• 30:00 - 30:30 myself a sugar daddy do you guys want to know what my sugar daddy's name is EPF guys all right 39-year-old shamain Osman is a recognizable figure in the Malaysian comedy circuit she has made a name for herself as a standup comedian screenwriter actor producer and director the minute I came out of my mom you know all my aunties
• 30:30 - 31:00 would have gathered around my mom and asked sh will not when Co 19 halted live entertainment it also cut off many of charmaine's income streams she even had to sell her 12-year-old car to help support herself financially so when the government announced that EPF contributors were allowed to withdraw their savings she didn't even think twice about it I was actually quite surprised with the amount
• 31:00 - 31:30 I had you know all the dividends that it collected um over the years I think the the security of having a roof of over my head um I didn't want to get evicted and you know with the even with the little writing jobs that I had the the payment structure is very spread out so I was just scared what if I didn't make enough to pay my rent so that's why I took took out the EPF my EPF money just so I could pay rent but unlike naslan she doesn't feel
• 31:30 - 32:00 the need to dip into her EPF account anymore instead she's become more conscious of her retirement needs we have to think about your future you know your savings for your retirement we shouldn't be dependent on that it's very enticing to want to dip into it again but I think the wise move is not too yeah more than 60% of Malaysians actually are living on paycheck to paycheck which means means they either spend exactly what they earn or either they spend more than
• 32:00 - 32:30 that and there are a lot of statistical reports that actually show Malaysians are not saving enough and the only reason they can survive well is because EPF is there so that doing retirement is already locked in to rebuild the EPF those at risk not only have to resist the temptation to dip into this Kitty they must also make up for the previous withdrawals by Saving more but this is proving difficult in the current inflationary
• 32:30 - 33:00 climate definitely High Cost of Living is one thing but another more pertinent issue is income because income is not growing as fast as it should have been compared to the cost of living and we're talking about a median salary of just 2,600 ring that's very low uh when half of the population is earning just about that and in certain States particularly in the less developed ones we're talking about kantan Sabah kadah for example the
• 33:00 - 33:30 median wage is just about 100 or 200 ring above the minimum wage so a lack of income is a critical issue the share of wages to GDP uh we call it compensation of employee remains low even compared to to America compared to Singapore compared to to UK we pay too low to our workers reason is also because we are stuck in a low value uh economic uh structure for a long time now the government through energy
• 33:30 - 34:00 transition road map through our national investment policy master plan try to revive the economy so that we can all move to a higher value ad economy high growth high value Industries and so on but that will take some time I think there's a systematic problem where the government over the years failed to increase the living standard of Malaysian in terms of bringing in higher value industry bringing in higher value jobs uh but very often our job is very
• 34:00 - 34:30 dependent on low skill labor low skill lowc cost labor we may be involved with big companies big Brands but low skill low cost and the ones that are high skill uh generally a portion of them will move to Singapore the government is now exploring ways to boost income the minimum wage was raised to 1,500 ring it this July it's also exploring a progressive wage model where
• 34:30 - 35:00 the salaries of semiskilled and skilled workers are gradually increased plans will be unveiled in the future so if done properly this could be something as how it's implemented in Singapore where the wages are progressively increased in tandem with uh inflation inflationary rate at least it takes two person to to dance a tangle right so we can't just say let's increase our the wage of construction
• 35:00 - 35:30 workers to 3,000 tomorrow yeah um the industry will collapse and we can increase it over time uh so that the industry uh could adjust and also at the same time uh the employees is also getting a commensurate um Gramm ntion I I like going to Singapore these policies will take time to bear fruit meanwhile Shain at least could have an ace up her sleeve I think I have enough time because I'm going to write a Blockbuster
• 35:30 - 36:00 movie it's going to collect a lot of money and I'm going to put it in my EPF yeah that's my plan yeah but what would happen if the retirement Time Bomb isn't [Music] diffused 44-year-old aah Muhammad is a trained auditor so he understands the
• 36:00 - 36:30 value of financial [Music] planning [Music]
• 36:30 - 37:00 this came in handy when he was retrenched from his job as an auditor in [Music] 2020
• 37:00 - 37:30 [Music] [Music] while aah could leave leave his EPF untouched others could
• 37:30 - 38:00 not through the four rounds of withdrawals 8.1 million Malaysians took out 145 billion ringid from the pension fund the median savings fell across all races with Mala being the most affected those who withdraw are mostly low-income people you face retirement crisis retirement crisis is not going to be in Next Generation it's already happening because shortsighted of the policy maker at that time a lot
• 38:00 - 38:30 of old age poverty and the buk of them going to be Malay people it's not healthy for multi-racial country like like us if you look the statistics the Medan saing among the bura Dr by about 70% is is much more than other groups we have a window for reform we have a window for uh improving the system we have a window I think in terms of educating the public on the need for saving for retirement and I think the the that we have a receptive audience people do realize the importance of it
• 38:30 - 39:00 it's just whether they have the capacity for it however this window is shrinking due to Malaysia's changing demographic when we started EPF you can withdraw at age 55 at that time life experity was 56 so you get one year you spend Jolly Jolly then you die it's okay now life is about 76 77 and you still withdraw at 55 before is okay because you die faster now you live longer without money the thing is Malaysia is
• 39:00 - 39:30 the second fastest aging country in Asia after Korea we'll be going from aging to age to Super age within the short span of 50 years essentially just about two generations so this is something that I think is um you know people like to say taking time bomb right we're seeing some of that happening today already what happens if large s of Malaysians retire without sufficient savings the burden would then fall upon
• 39:30 - 40:00 the Next Generation or the state creating a sandwich class as the eldest son Suk vinda's parents rely on him in their Twilight years because I have to support my family my parents are old so for their medication for their for saving for them to use for their daily use they are the
• 40:00 - 40:30 one who brought me up so I what they want I give them what they what I cannot give they will understand from me what I can help I will help them what makes you happy they are still alive they happy I still here with [Music] them it's not just suppos your parents is also supporting your children and I think the especially for the boomer
• 40:30 - 41:00 generation is now starting to you're having to support your grandchildren at the same time so it's like three or four generations where that that one generation has the support so yes that's that that is a factor um and it is happening old AG poverty also has already increased and it's going to get get much worse because your EPF savings already been depleted like give the statis to you one in two has only 200 per month to live until they die it's much below poverty line which means
• 41:00 - 41:30 they're qualified for uh social assistance which mean the amount that government have to give going to be much increases so there is a Race Against Time now to rebuild Malaysia's retirement Kitty in the latest government budget announced last week prime minister anoai Ibrahim unveiled a slew of measures to encourage voluntary contributions by contract workers and to
• 41:30 - 42:00 expand coverage for housewives there are other mechanisms that we can look at for one thing is one you could raise the retirement age you know there's a lot of policy options raise retirement age increase employment for the elderly but even increasing the retirement age has its limitations the main policy advice is you have to work longer and you have to save more more but if they wanted to have a decent pension it would be 600,000 ring even 900,000 ring depending
• 42:00 - 42:30 on the the type of household that they're in so if you have somebody who's 40 years old or 50 years old or 55 years old and they have very little time left to work it's not possible for them to save more or to work longer also proposed is a third EPF account which workers can freely access in a emergencies this is on top of a proposal in March for retirement money to be used
• 42:30 - 43:00 as collateral to secure bank loans in emergencies but Ana's loan suggestion has come under Fire from several quarters The Proposal did not come from EPF it was just out blue announc in Parliament you can use it to go and borrow we already highly indepted we one of the highly indepted country household in this region I think second after after uh Thailand we are highly inded the government also highly IND deped now you
• 43:00 - 43:30 want them to go and borrow some more what's what's the [Music] reason
• 43:30 - 44:00 interest
• 44:00 - 44:30 interest for now there appears to be no quick fix to the problem there's no Silver Bullet that could help turbocharge the retirement savings as the salaries of workers remain low and cost of living remains high is important for us we cannot depend on other thing he is our backup spare backup anything happen anything know what we have our EPF to support us if I have money more more money I will
• 44:30 - 45:00 put in the account just let my money grow there we need to increase the per capita income of our citizen yeah higher income
• 45:00 - 45:30 means more savings and more contribution to EPF account and secondly better economic activities uh higher growth rate definitely will also help in creating uh higher value jobs and also more business opportunities for business so that they can also pay more to the workers and yes that time bomb is taking uh we have maybe uh 10 15 20 year window to actually do something about [Music]
• 45:30 - 46:00 it