Zuki said irregular contributions, particularly among those in informal or gig economy roles, have exacerbated the situation.
“The growing shift towards informal work has led to fewer individuals accessing formal retirement savings schemes such as EPF.
“Compounding this is the relatively low level of financial literacy, which limits people’s understanding of the importance of saving and retirement planning,” he said in his welcoming remarks for Financial Literacy Month 2024.
The government has moved to improve wages following the implementation of the Public Service Remuneration System (SSPA), which will replace the Malaysian Remuneration System from Dec 1.
Under SSPA, there will be a 15% salary adjustment for civil servants in the implementation, management and professional groups, and 7% for those in top management.
The government previously raised the minimum wage in major cities from RM1,200 per month to RM1,500 in 2022, and to RM1,100 in other parts of Malaysia in 2020 to help address the rising cost of living and improve the financial situation of low-wage workers.
Zuki said the Financial Education Network’s National Strategy for Financial Literacy has reported that 41% of Malaysians rely on EPF savings as their primary retirement income.
However, only 34% of active members under 55 have met the basic savings quantum, indicating that many remain unprepared for retirement as of June 30.
He said that currently, only 29% of the elderly population receives a monthly pension, primarily from the civil service pension scheme and assistance programmes like Bantuan Warga Emas.
“This leaves the remaining elderly population dependent on either their EPF savings, personal savings, family support or continued employment to meet their living expenses in old age,” he said.
Zuki said a Credit Counselling and Debt Management Agency survey has revealed that many workers under 40 are not actively saving for retirement, as they tend to prioritise immediate financial needs over long-term security.
According to the Malaysia Ageing and Retirement Survey, 26% of respondents expect to continue working until their health no longer permits them to do so, he said.