EPF urges govt to increase contribution to help 'gig economy' workers

KUALA LUMPUR: The Employees' Provident Fund (EPF) has called on the government to increase its contribution to the 1Malaysia Retirement Savings Scheme (SSP1M) in an effort to bolster the participation of Malaysians who are engaged in the 'gig economy'.
The gig economy is defined as an economy where temporary, flexible jobs are common with companies looking toward hiring independent contractors and freelancers instead of full-time employees.
Its chairman Tan Sri Samsudin Osman said the call was to lure those in that category to subscribe to the scheme with added incentives.
"In Malaysia, the gig economy is rising at a faster pace than the traditional job market which means individuals who seize work opportunities in that category are often left out from social security coverage.
"The growth of the gig economy which is also known as the informal sector, has increased by 31% this year, surpassing the traditional jobs' workforce," he told reporters during the International Social Security Conference 2017 at the Aloft Hotel, here, today.
The newly introduced SSP1M is a government initiative to ensure self-employed individuals without fixed monthly income have a savings plan upon reaching retirement age.
At present, the government is contributing 10% with a maximum amount of RM120 per year to members of the scheme, on top of the scheme's yearly dividend.
Meanwhile, EPF deputy CEO (Strategy Division) Tunku Alizakri Raja Muhammad Alias said the government-based retirement fund has taken on a larger advisory role to its members by recently introducing its retirement advisory service
"We need to make sure that people understand the importance of having adequate savings upon retirement and how to prepare for it as early as possible. As such financial literacy is a key sector," he said.
Tunku Alizakri pointed out whilst many individuals are making a lot of money in the gig economy for now, their failure to save for the future could prove troublesome upon retirement.
"EPF employees are now certified and are able to give advice to our members on how to prepare for their retirement in the future.
"In the future, products and services that EPF will introduce in the next few years will cater towards the changing lifestyle," he added.