Members of the Employees Provident Fund (EPF) earning up to RM5,000 a month will receive a boost in their retirement savings when the revised employers’ statutory contribution of 13 percent takes effect from January 2012.

EPF public relations general manager Nik Affendi Jaafar said the one percent increase from the current 12 percent would benefit 5.3 million working Malaysians, comprising 92 percent of EPF's active members.

The employees’ contribution rate remains at 11 percent, he said in a statement today.

Employees aged 55 and above and earning wages not exceeding RM5,000 will also benefit from the revised rate as their emloyers are now required to contribute at 6.5 percent, which is an additional 0.5 percent from the current 6 percent. The employees continue to contribute at 5.5 percent.

“Prime Minister and Finance Minister Najib Abdul 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.

EPF said previous studies had shown that 70 percent 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 percent contribution, coupled with the power of compounding dividend, would add up to a healthier savings for the retirement of working Malaysians,” Nik Affendi added.

- Bernama