More Malaysians Top Up Retirement Funds As Epf Raises Savings Targets

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More Malaysians are boosting their retirement savings as life expectancy rises, with the Employees Provident Fund (EPF) reporting stronger contributions and balances alongside planned hikes to its Basic Savings threshold. NSTP/ASWADI ALIASKUALA LUMPUR: More Malaysians are boosting their retirement savings as life expectancy rises, with the Employees Provident Fund (EPF) reporting stronger contributions and balances alongside planned hikes to its Basic Savings threshold.
The EPF said retirement readiness is improving following a steady increase in voluntary top-ups and contributions above the statutory rate.
Currently, 42 per cent of members aged 51 to 55 have reached the Basic Savings benchmark, up from 36 per cent two years ago.
Basic Savings is a set amount according to age to ensure at least RM240,000 by 55, allowing withdrawals of RM1,000 a month for 20 years.
Under the new three-tier Retirement Income Adequacy framework, the threshold for members turning 60 will rise from RM240,000 to RM290,000 in January 2026, RM340,000 in January 2027 and RM390,000 in January 2028.
EPF estimates that RM390,000 would allow withdrawals of RM1,625 in the first year of retirement, increasing to RM4,434 by year 20, though this may still fall short of the RM2,690 a single elderly person is estimated to need each month for a decent life.
Still, EPF is optimistic. The average savings of members aged 50 to 54 climbed from RM265,788 in 2022 to RM308,644 in 2024, exceeding the 2026 Basic Savings target.
"This overall improvement has been driven by both policy enhancements and stronger contributions," EPF told Malay Mail in an email response.
"A significant step was the restructuring of EPF accounts in May 2024, which increased the allocation of contributions to the Retirement Account from 70 to 75 per cent.
"By directing more savings into long-term funds, account restructuring provides members with a stronger foundation for life after retirement," it added.
Voluntary contributions are surging. Schemes such as i-Saraan and i-Suri are increasingly popular even among informal workers, with voluntary top-ups rising 62 per cent in 2024 while active membership grew faster than the labour force.
Formal sector members are also adding more through the Voluntary Excess programme, which allows employees or employers to contribute above the statutory rate.
In the first half of 2025, 34,442 formal sector members contributed above the statutory rate, nearly double the 19,591 recorded a year earlier.
Prime Minister Datuk Seri Anwar Ibrahim has proposed monthly pension-style payments for new EPF members under the 13th Malaysia Plan.
Deputy Finance Minister Lim Hui Ying said future contributions would be split into a Flexible Savings account, withdrawable at any time, and an Income Savings account to be paid out regularly until exhausted.
EPF said the proposal reflects rising life expectancy and an ageing population but stressed that "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." - NST

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