Review current policies to help B40 financially sustain after retirement
SHAH ALAM - To assist B40 people in sustaining their financial well-being after retirement, the unity government must review the current policies on protection floor and adequacy.
Senior Research Fellow at Social Wellbeing Research Centre (SWRC) of Universiti Malaya, Dr Zulkiply Omar, explained that the protection floor refers to the retirement insurance coverage given to the people, whereas adequacy refers to the sufficiency of their retirement savings.
"At this point, there are still many people in certain sectors who are not covered by any retirement plan. For example, agriculture workers, gig workers, housewives, and others.
"We need to get these people to at least subscribe to the Employees Provident Fund (EPF) and that should be the first priority. "They should also subscribe to the Social Security Organisation (Socso) to mitigate other employment related risks," he told Sinar Daily.
Meanwhile, Zulkiply further said that the government should be looking at adequacy as well because there are many people who do not have enough income to retire despite having an EPF account.
"Policy direction should be on improving social assistance and labour market programmes. Social assistance is defined as direct cash transfers or in-kind transfers to vulnerable groups.
"From a retirement perspective, the government should target a universal basic pension for everyone as soon as possible," he urged.
By addressing this issue, we will ensure that individuals have adequate retirement incomes, particularly those with insufficient EPF savings.
At the same time, he further explained that the government should also take a more proactive approach to addressing the adequacy problem through labour market interventions.
"The programmes should focus on improving people's skills, reskilling them, so they are always relevant in the labour market.
"In fact, this will contribute to productivity improvement for the whole economy as well. There is also a trend towards people working beyond the current retirement age."
Zulkiply also stated that this trend should be supported with appropriate policies because it not only helps people increase their post-retirement income, but it also contributes to productivity improvement by leveraging retirees' accumulated experiences.