Finance Minister II says consistent contributions could see 60% of EPF members reach the basic savings target, as new data shows a rise in active savers and median wages.
PETALING JAYA: About 60% of Employees Provident Fund (EPF) members could reach the basic savings level estimated at around RM390,000 by age 60 – if they continue contributing consistently and maintain their retirement accounts, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said as of the end of last year, only 3.1 million or 41.2%, of active Malaysians aged 18 to 55 in the formal sector have reached the basic savings benchmark for their age, up from 30% in 2022.
“This leaves 4.42 million or 58.8% of formal sector members still short of the minimum savings target needed to ensure adequate funds for retirement,” he said during a question-and-answer session at the Dewan Negara yesterday.
Amir Hamzah was replying to a supplementary question from Senator Datuk Ng Keng Heng regarding the government’s official estimate of the percentage of citizens who are expected not to reach the sufficient minimum savings level by retirement age in the next 10 to 20 years.
He said the government, through the EPF, is committed to curbing the erosion of basic retirement savings caused by early withdrawals by introducing the Retirement Income Adequacy (RIA) benchmark.
“RIA serves as a guide for members to assess the sufficiency of their savings before making withdrawals, promoting more prudent long-term financial planning.
“Several initiatives are also ongoing to boost savings, including account restructuring through flexible accounts, encouraging voluntary contributions and active promotion of programmes such as i-Simpan, i-Saraan and i-Topup.”
Amir Hamzah also highlighted that the number of active employers registered with the EPF rose 4.2% to 640,391 in 2025, up from 614,563 in 2024.
He added that contributions from formal-sector employees also increased, rising 3.3% to 8.2 million in 2025 from 7.9 million the previous year.
“Meanwhile, median salaries for active formal-sector Malaysian members climbed 6.3% to RM2,764 compared with RM2,600 in 2024. These positive trends helped push annual EPF contributions from Malaysian members to RM120 billion in 2025, a 12% increase from RM107.1 billion in 2024.”
Amir Hamzah said to strengthen the RIA, EPF has rolled out several key initiatives, including the addition of RM15.7 billion to retirement accounts since May 2024, following an increase in the contribution allocation from 70% to 75%.
He added that by Dec 2025, 364,000 members had registered for i-Topup contributions, allowing them to contribute beyond the statutory rate. Meanwhile, 187,000 spouses participated in the i-Sayang programme, with total transfers reaching RM371.3 million.
“Voluntary contributions also saw significant growth, with 687,000 members contributing RM15.25 billion under i-Simpan without government incentives, while i-Saraan contributions hit RM3.97 billion from 720,056 members, a 50.8% increase from 2024, accompanied by an 80.1% rise in government incentives to RM206.75 million.”
Amir Hamzah said despite the improvement, retirement savings adequacy has yet to fully recover, particularly after the RM146 billion in Covid-19-related withdrawals that affected members’ savings.
He emphasised that EPF is stepping up awareness campaigns to urge members to opt for monthly withdrawals instead of full lump-sum withdrawals, which could reduce income after retirement.
“Retirees are encouraged to avoid withdrawing their savings in a lump sum. Monthly withdrawals allow remaining balances to continue earning annual dividends, leveraging compounding to ensure funds last longer during retirement. Strengthening retirement savings requires sustained, long-term efforts to secure the wellbeing of Malaysians in their post-working years.”
The Sun Malaysia
