Old-Age Financial Protection in Malaysia : Challenges and Pptions
This policy paper presents key findings and suggestions on Malaysia s old-age financial protection system within the context of the country s broader social security framework. The trademark policy approach focusing on job creation instead of expan...
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| Language: | English en_US |
| Published: |
World Bank Group, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/11/20425543/old-age-financial-protection-malaysia-challenges-options http://hdl.handle.net/10986/21038 |
| Summary: | This policy paper presents key findings
and suggestions on Malaysia s old-age financial protection
system within the context of the country s broader social
security framework. The trademark policy approach focusing
on job creation instead of expanding social security
programs served the country well to move it quickly to a
high-middle income level. But to join the club of
high-income countries in a sustainable manner may require
the country to review its approach to social security,
including the way old-age income support is provided, and to
address the main current weaknesses: fragmentation across
economic sectors, lack of an enabling political environment,
incomplete benefit coverage, low mandated savings level, and
inadequate disbursement options given the challenges of
projected population aging and socioeconomic shifts. To
address the old-age financial protection challenge, the
paper outlines two key options for Malaysia's employees
provident fund, the country's central pension pillar:
(i) moving from a mere retirement savings investment fund to
a fully-fledged pension fund that offers some minimum
annuities; or (ii) more radically, moving the benefits
toward a non-financial defined contribution scheme with the
fund s resources used as its major reserve fund. Whatever
approach is considered, the reform discourse will benefit
from changes in the overall governance structure of social
security and from a comprehensive research agenda that
offers an evidence based decision making. |
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