A former Employees Provident Fund (EPF) chief has suggested that employers contribute more towards the retirement savings of lower income workers, while reducing their contribution rate for higher earners.
Former EPF CEO Tan Sri Shahril Ridza Ridzuan raised the idea while speaking at EPF’s International Social Wellbeing Conference 2026, “The Long Horizon”, in Kuala Lumpur on Sept 30.
Up to 16% for workers earning below RM5,000
According to Shahril, Malaysia’s EPF contribution rate itself is not necessarily the main issue when it comes to retirement savings.
Instead, he pointed to slower wage growth, saying workers may still struggle to accumulate enough savings if their salaries remain low despite relatively high contribution rates.
As one possible approach, he suggested introducing a more progressive employer contribution structure.
For example, employers could contribute around 15% to 16% for employees earning below RM5,000 a month.
He said such a move could allow lower income workers to build up their retirement savings at a faster pace.
Employer contribution could drop to 4% for higher earners
At the same time, Shahril floated the idea of lowering employers’ contribution rates for employees earning more than RM10,000 a month.
Using a hypothetical example, he suggested employers could contribute just 4% for this group.
He explained that higher earners may already be in a stronger position to meet their retirement goals, and reducing contributions at this level could help balance the higher contribution rate given to lower income workers.
Shahril also argued that such an approach could be preferable to giving different EPF dividend rates based on how much a member has saved.
Current EPF rates remain unchanged
However, Shahril’s comments were only a proposal and do not represent a new EPF policy or an announced change to Malaysia’s contribution rates.
Under the current structure for Malaysian employees below the age of 60, employees generally contribute 11% of their wages.
Employers contribute 13% for employees earning RM5,000 and below, while the employer rate is 12% for those earning above RM5,000.
EPF’s latest statutory contribution schedule remains governed by the Third Schedule of the EPF Act 1991.
Gig workers also mentioned
Shahril also touched on retirement protection for gig workers.
He suggested that a revenue tax could be imposed on gig platforms, with the money collected used to fund EPF contributions for workers operating through those platforms.
He said more creative solutions were needed to ensure workers who currently have less retirement coverage are better protected in the long term.
