We’re starting off the New Year with a boost in our retirement savings! Via The Star Online, “The revised employers’ statutory contribution rate of 13% to the Employees Provident Fund for workers earning less than RM5,000 a month will take effect from January. EPF public relations general manager Nik Affendi Jaafar said the 1% increase from the current 12% will benefit about 5.3 million working Malaysians, who make up 92% of EPF’s active members. “The employees’ contribution rate remains at 11%,” said Nik Affendi.”
Employees who are 55 years and above and earning wages not exceeding RM5,000 will also benefit from the revised rates, as employers are now required to contribute at 6.5% – an additional 0.5% from the current 6%.
"Prime Minister and Finance Minister Datuk Seri Najib Tun Razak announced the increase in employers' contribution for those in this income group during his 2012 Budget Speech as a move to redress the problem of inadequacy of income during retirement which retirees are now facing," Nik Affendi said.
It was highlighted that EPF said previous studies had shown that 70 per cent of retirees could exhaust their savings within 10 years from the onset of their retirement.
"As such, the EPF commends the government for its quick action in putting a damper on the problem as the additional one per cent contribution, coupled with the power of compounding dividend, would add up to a healthier savings for the retirement of working Malaysians," Nik Affendi added.