39pct of EPF members on track to meet basic savings target

KUALA LUMPUR: Nearly four in 10 active Employees Provident Fund (EPF) members in the formal sector are now on track to meet the basic savings benchmark of RM390,000 by age 60, Prime Minister Datuk Seri Anwar Ibrahim said.

The proportion rose from 36 per cent in June 2025 to 39 per cent in June 2026.

Under the EPF's Retirement Income Adequacy (Ria) framework, the government aims to raise the proportion to six in 10 by 2030.

However, Anwar said too many Malaysians remained at risk of outliving their savings during retirement, which could last between 20 and 25 years.

"This is progress, but too many Malaysians remain at risk of outliving their savings during a retirement that may last 20 to 25 years," he said in a speech delivered by Finance Minister II Datuk Seri Amir Hamzah Azizan at the EPF International Social Wellbeing Conference 2026.

Anwar said retirement adequacy remained a challenge as millions of Malaysians worked outside conventional formal employment, while the social protection system was largely designed around formal employment.

"As the nature of work changes, our systems must evolve alongside it," he said.

He said retirement planning must also take into account the immediate financial pressures faced by households, particularly those struggling to meet day-to-day expenses.

"For a household managing food, rent and school expenses, the horizon may be the end of the week," he said.

Anwar said asking people to prepare for retirement decades ahead, while they remained uncertain about their near-term finances, was not simply a matter of financial literacy but also financial capacity.

"Retirement security begins with income, decent work and the ability to save consistently.

"This is why the wage agenda, and the retirement agenda must move together," he said.

Meanwhile, EPF chairman Tan Sri Mohd Zuki Ali said the increase in the proportion of members meeting the basic savings benchmark provided an early indication that clearer retirement savings targets could influence financial behaviour.

He said the Ria framework, which sets benchmarks for basic, adequate and enhanced savings, represented a shift in how members viewed retirement savings.

Rather than treating retirement savings as a lump sum to accumulate, members needed to view them as an income stream that would have to last throughout an increasingly long retirement period.

"The proportion of active Malaysian members in the formal sector meeting the Basic Savings benchmark for their age rose from 36 per cent in June 2025 to 39 per cent in June 2026, a gain of three percentage points in a single year," he said.

Zuki described the increase as a modest but meaningful signal that members were beginning to recognise the importance of retirement adequacy.

He said the development reinforced the EPF's view that clear benchmarks, when consistently communicated, could encourage changes in savings behaviour.

The EPF has also introduced measures to strengthen retirement security through family support and regular income withdrawals.

Zuki said i-Legasi allowed eligible members with sufficient retirement savings to transfer part of their savings to the EPF accounts of immediate family members, providing another avenue for intergenerational support.

Through i-Emas, eligible members can receive regular monthly payments from their retirement savings while the remaining balance continues to earn dividends.

As at June 2026, more than 25,000 members had opted for monthly withdrawals upon reaching age 55 or 60, comprising more than 7,000 members aged 55 and more than 19,000 aged 60.

Zuki said these initiatives formed part of the EPF's broader efforts to strengthen Malaysia's retirement system and build a more inclusive social protection system.