Can you depends on your EPF funds for retirement and what you need to do to achieve that?

Lee Wei Lian October 29, 2012

Malaysians can’t depend on EPF for retirement, says pension fund expert

KUALA LUMPUR, Oct 29 – Malaysians are at risk of a lower standard of living during retirement if they rely solely on EPF said the chief executive of Private Pension Administrator Malaysia Datuk Steve Ong.

Ong said that Malaysia’s current income replacement levels for retirement was only 30 per cent while the average for OECD countries was 57 per cent.

He said that Malaysian’s needed to put an estimated 30-35 per cent of monthly pay into a pension fund for a higher probability of achieving an income replacement rate of two-thirds.

Ong said that those who are currently contributing to EPF already are at about 23 per cent.

“If you contribute another 10 per cent more, there is a higher probability of you getting a two-thirds income replacement for your retirement,” he said at the Malaysian Capital Market Summit here.

Ong said that those who do not plan for their retirement risked having to work longer or cut back on their standard of living during retirement.

He also said that the private pension fund industry could potentially add another RM1 trillion worth of funds to the Malaysian capital market based on each of the 13 million working adult Malaysians contributing RM3,000 to a private pension fund per year for 25 years.

“Think what RM1 trillion can do for the capital markets,” he said.

Ong noted that Australia’s private pension fund industry is now the fourth largest in the world with A$1.5 trillion worth of assets under management, despite their small population.

Malaysia currently has eight private pension funds approved by the government.

Malaysians who contribute to private pension funds are also given RM3,000 in tax deductible allowance.

Posted by: www.in-tune.biz

In Tune specialises in finance and accounting outsourcing, human resource (HR) outsourcing to SME business owners in Malaysia; that traditionally cannot afford professional services which they now can at a fraction of the cost less the headache; so that they have more time to focus on the business operations that matters to them.

Why hire an executive when you can now get at least one qualified professional with an executive at less than an executive pay?

Tags: , , , ,

No comments yet.

Leave your comment