Only 60% of the 17 million workforce in Malaysia are covered by EPF, said EPF CEO Ahmad Zulqarnain Onn.
Zulqarnain said that this figure was worrying and low compared to the global average of 68%, as reported by the local news agency, Astro Awani.
The EPF or Employees’ Provident Fund is a Malaysian government agency that manages a compulsory savings plan and retirement planning for private and non-pensionable public sector employees.
“The majority of the workforce that are not protected are not protected are those in the informal sector, including freelancers and those who are self-employed like gig workers,” he said.
He also added that the 4.1 million workers who worked in the informal sector consisted of three million self-employed workers, 582,000 were business owners while the remaining 494,000 were unpaid family workers.
Based on observing the drastic upward trend in the gig sector, he expects the workforce in the informal sector to 33% by the year 2040, in comparison to the current 26%.
Meanwhile, the workforce in the formal sector is expected to drop to 37% from the current 42% in the next 16 years.
Zulqarnain also explained that the situation has sparked concern as Malaysia is expected to become an aged nation by 2043 and a super-aged nation by 2057.
“The birth rate dipping by 1.6% in 2023, would see Malaysia become an aged nation a lot faster. By 2043, about 14.9% of the population, or 39.9 million would be aged 60 and above, while the birth rate would drop to 6.6 million.”
At the current trajectory, Malaysia was ageing faster than developed countries such as the UK, France and Australia, stated Zulqarnain.
This situation, he said, would require the government to prepare the infrastructure, services and jobs to support this phenomenon. – the Sun
