KUALA LUMPUR, 25 September 2025 – More Malaysians are taking proactive steps to secure their retirement as the Employees Provident Fund (EPF) reports a sharp rise in voluntary contributions and savings beyond statutory rates.
The pension fund said retirement readiness is improving, with 42% of members aged 51 to 55 meeting the Basic Savings threshold, up from 36% two years ago. Basic Savings sets a pre-determined amount according to age, ensuring at least RM240,000 by age 55, enough to support monthly withdrawals of RM1,000 for 20 years.
New Retirement Income Adequacy Framework
Under the three-tier Retirement Income Adequacy (RIA) framework, EPF will gradually raise the Basic Savings threshold for members turning 60:
- RM290,000 by January 1, 2026
- RM340,000 by January 1, 2027
- RM390,000 by January 1, 2028
According to EPF’s calculations, RM390,000 in savings will allow retirees to withdraw RM1,625 in the first year, increasing to RM4,434 by year 20. However, this may still fall short of the estimated RM2,690 monthly needed for a single elderly person to maintain a decent standard of living.
Higher Savings Among Older Members
EPF noted encouraging progress, with the average savings of members aged 50–54 rising from RM265,788 in 2022 to RM308,644 in 2024 — above the 2026 Basic Savings threshold.
“This overall improvement has been driven by both policy enhancements and stronger contributions,” EPF told Malay Mail.
A key step was the May 2024 restructuring of EPF accounts, which increased contributions to the Retirement Account from 70% to 75%, directing more funds into long-term savings.
Surge in Voluntary Contributions
Voluntary schemes such as i-Saraan and i-Suri are gaining traction, especially among informal sector workers. In 2024, voluntary contributions jumped 62%, with active membership growing faster than the labour force.
The Voluntary Excess (VE) contribution programme has also gained momentum, enabling formal sector employees and employers to top up beyond statutory rates. In the first half of 2025, 34,442 members made VE contributions, almost double the 19,591 members in the same period a year earlier.
Pension-Style Payouts Under Review
Looking ahead, the government has proposed monthly pension-style disbursements for new EPF members under the 13th Malaysia Plan. Deputy Finance Minister Lim Hui Ying explained that future contributions could be split into:
- a Flexible Savings account for anytime withdrawals
- an Income Savings account for regular monthly payouts until fully utilised
EPF acknowledged the proposal reflects longer life expectancy and Malaysia’s ageing population, but stressed no changes have been made to withdrawal or dividend policies.
“For EPF, any proposal will only be considered after detailed study and engagement to ensure it meets members’ needs while maintaining the sustainability of the overall system,” it said.
