Prime Minister Datuk Seri Najib Tun Razak in his Budget 2012 speech, announced the rate increase is a move to help those with insufficient savings to bear the cost of living upon retirement.
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 next month.
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 in a press statement yesterday.
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%.
While most employees will welcome the boost in their retirement savings, employers fear that the increase will be a burden to them.
Malaysian Employers Federation executive director Shamsuddin Bardanhad said most employers may find it difficult to absorb the additional cost and that they might reduce their manpower
