Increase employees' targeted contribution

SHAH ALAM - An increase in targeted contribution according to the employees' years of service can be considered by employers in an effort to further increase savings in Account 1 of the Employees' Provident Fund (EPF).

Malaysian Trade Union Congress (MTUC) president Mohd Effendy Abdul Ghani said however, it was subjected to employers who were able to help employees reach a basic savings of at least RM35,000 in an EPF account at the age of 30.

"Targeted contribution based on the employee's years of service can benefit both parties besides helping employers retain employees in their company.

"However, it depends on the employer who has the ability. Therefore, this encouragement needs to be given to employers so that targeted contribution according to the employee's years of service can be one of the contributors for employees to have a basic savings," he told Sinar Premium.

Effendy said the enforcement of RM1,500 minimum wage was also one of the government's efforts to prevent discrimination against any employee.

"Prior to the minimum wage implementation in the country, every company is free to set varying starting salaries according to ability. With this enforcement, there will no longer be discrimination against workers when the floor salary of RM1,500 is given to all regardless of gender, race and religion.

"The implementation of the minimum wage will also be reviewed every two years to balance the current cost of living," he said.

He added that the government's measure to enforce the minimum wage under the policy framework of the progressive wage system can also ensure that workers' income is increased in line with the appropriate experience, skills and qualifications.

"The implementation of the progressive wage system is also a good action by the government in ensuring that there is an increase in salary for those who have just started working or are currently working.

"A progressive wage system that goes hand in hand with the minimum wage shows a potential of strengthening productivity and indirectly increasing employee contribution in the EPF," he said.

Previously, EPF advised Malaysians to have basic savings of at least RM35,000 at the age of 30 to reach the minimum amount of savings required to support life after retirement.

Its chief executive officer Datuk Seri Amir Hamzah Azizan said currently only 19 per cent of 446,000 EPF members aged 30 have managed to reach the savings target of RM35,000 with an average savings of RM78,000 per person as of June 2023.