Barjoyai Bardai of Universiti Tun Abdul Razak said EPF’s focus was on people in the middle-income and high-income groups.
Those with low incomes would not have enough funds for retirement in their accounts even after years of employment, he said.
“The recent floods made us realise just how fragile our society is. When people lost their homes, they no longer had anything.
“So we need another system of social security for the low-income group. This other system must be based on more than just savings,” he told FMT.
Barjoyai suggested the creation of an endowment scheme.
He spoke of the trust fund that Norway established in 1990. Surpluses from oil revenues were consolidated in the fund and invested, resulting in an asset growth to more than US$1.4 trillion about 30 years later.
This essentially ensured that every citizen was a millionaire and could retire comfortably.
He said Malaysia could emulate this by using the revenues of Petronas, Khazanah Nasional Berhad and other government-linked companies.
“If all this is capitalised on in an endowment fund and managed independently of the government, we will generate enough income in 20 years and future retirees will be more protected,” he said.
Barjoyai also suggested that EPF be restructured to make it an investment bank and insurance institution so it could still give some protection to subscribers.
It was recently reported that the various withdrawal facilities allowed because of the Covid-19 pandemic had left 6.1 million EPF account holders with less than RM10,000, including 3.6 million with less than RM1,000.
Barjoyai said something needed to be done urgently to look after retirees, especially those in the low-income group, or the nation could see more people being pushed into hardcore poverty late in their lives.
Firdausi Suffian of Sabah UiTM said EPF’s latest statistics showed that the government should not allow people to make further withdrawals from their accounts, despite political pressure to do so.
He told FMT the government should instead continue to pump direct cash aid into people’s hands since replenishing their EPF savings would not be as easy as it might sound.
He said many Malaysians remained unemployed, making it harder to regain their EPF savings or save money in general.