Malaysia must move beyond EPF to prevent elderly poverty, says lawyer

SHAH ALAM – Malaysia should replace the current Employees Provident Fund (EPF) model with a national pension system to ensure no elderly citizen falls into poverty after retirement, says lawyer Khoo Kay Ping.

The Demi Rakyat writer said the existing EPF structure was no longer sufficient to guarantee long-term financial security for retirees, especially after many depleted their savings within a few years of retirement.

Khoo said the proposed pension system would provide every Malaysian aged 65 and above with a fixed monthly income for the rest of their lives.

“The problem with EPF is that it does not ensure senior citizens have enough money for the rest of their lives.

“After a few years, many finish their savings and are forced to work again or struggle just to survive,” he told Sinar Harian during an interview at Kompleks Karangkraf on Friday.

He said under the proposed model, contributions collected from working adults over a 30-year period would be channelled directly into a national pension fund instead of being invested for profit in financial markets.

“The money collected would be continuously distributed back to senior citizens every month.

“It would not go into the share market or be exposed to external economic risks,” he said.

Khoo argued that such a system would inject large amounts of spending power back into the domestic economy while simultaneously solving elderly poverty.

“Imagine if nobody had to worry about financial problems in old age. Everyone would have peace of mind,” he said.

He pointed out that retirement systems in several countries still rely heavily on market-linked investments, leaving pension values vulnerable to economic downturns and currency fluctuations.

Khoo said Malaysia’s current EPF mechanism became even more fragile after the Covid-19 pandemic, when many contributors withdrew large portions of their savings to survive financially.

“That is the main problem. After Covid, many people used up their EPF savings.

“Now people are even being encouraged to use EPF for medical insurance payments. That does not make sense because retirement savings are being reduced further,” he said.

Under his proposal, Malaysians would contribute to the pension system during their working years before receiving guaranteed monthly payments from age 65 onwards.

He stressed that the system would apply to everyone, including homemakers, rather than being limited to civil servants as with traditional pension schemes.

“I want a system where no one becomes poor when they grow old.

“Even housewives and househusbands should be protected under the system,” he said.

Khoo clarified that individuals would still be free to work after 65 if they wished, but the pension would act as a guaranteed financial safety net.

“People can still work, travel or continue their own businesses. But the key idea is that nobody should face poverty after 65,” he said.

He added that EPF, as it exists today, functions more like a personal savings account that can eventually be exhausted, particularly for average-income earners.

“Rich people may have millions saved, but ordinary people often finish their money within a few years.

“This system ensures everyone receives enough every month for life,” he said.