Norma Mansor, a professor at the social wellbeing research centre (SWRC) at Universiti Malaya, warned that the number of dependents in Malaysia is expected to grow sharply.
“As our society ages, a pertinent issue that develops is the number of dependents, the people who rely on a member of the working population to support him financially,” she said at the Malaysia Outlook Conference 2023 here today.
The conference was hosted by the Institute for Democracy and Economic Affairs (IDEAS).
Citing current data, she said that there are 10 dependents for every 100 working Malaysians currently.
“By 2030, there will be 18 dependents for every 100 working adults. In 2050, this will rise to 26 and then to between 50 and 80 by 2040,” she said.
She said that if the country cannot find a way to support the new population structure, its economic growth will be affected.
On the same matter Lee Hwok Aun, a senior fellow at the ISEAS Yusof Ishak Institute in Singapore, shared worrying statistics on the re-entry of people closer to retirement age into the workforce.
He told the conference that up to the third quarter of 2020, people aged 55 to 65 accounted for the lion’s share of those seeking to work again. This was up 15% from the same period the year before.
Lee said the increasing trend of people returning to the workforce was an indication of financial insecurity among seniors in the population.
“There is also a lack of social protection income schemes that are adequate enough for the population,” he said.
Norma said calculations by the SWRC showed that only 45% of the population has some form of social protection upon retirement.
“For the 55% who do not have such protection, income after retirement or a pension is a big issue,” she said.
She pointed out that for those who have not had formal employment, and therefore no savings, the impact would be severe.
Lee said a way out is for a universal pension scheme to be set up for those who have reached a certain age.
Alternatively, Norma added, the government could make it compulsory for all Malaysians to contribute to a pension fund.