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Poverty and Income Replacement Profile Among EPF Retiree in Malaysia

Author

Listed:
  • Negin Vaghefi

    (University of Malaya
    Penang Institute)

  • Fatimah Kari

    (University of Malaya)

  • Muzalwana Abdul Talib

    (University of Malaya)

Abstract

Social security policies often focus on replacement rates, which indicate retirement income or social security benefits in relation to preretirement income. The higher replacement rate among the pensioners would ensure that the ageing society would have sufficient income to lead a normal life after retirement. This study examined factors that influencing the income replacement rate of Malaysian Employee Provident Fund (EPF) retirees. The analysis was based on a nationwide survey conducted in 2013–2014 among EPF retiree. A logit model was used to evaluate the likelihood of selected socio-demographic and economic factors contributing to income of the retirees. The results indicated that around 62 % of elderly has lower retirement income compared to their preretirement income and it makes them more vulnerable to unpredictable events and financial conditions. The study suggested that the income replacement rate of elderly could be strengthened by investing in ageing workforce, raising retirement age, enhancing educational achievements of low income groups and restructuring employment. These may in turn increase the availability of skilled workers, enhancing the national productivity, increase the income security of retirees, reduce poverty, and develop economic growth of the country.

Suggested Citation

  • Negin Vaghefi & Fatimah Kari & Muzalwana Abdul Talib, 2017. "Poverty and Income Replacement Profile Among EPF Retiree in Malaysia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(3), pages 1065-1078, July.
    • Handle: RePEc:spr:soinre:v:132:y:2017:i:3:d:10.1007_s11205-016-1326-1
    DOI: 10.1007/s11205-016-1326-1
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    References listed on IDEAS

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    1. Andrew G. Biggs, 2011. "Social Security: The Story of Its Past and a Vision for Its Future," Books, American Enterprise Institute, number 6033, September.
    2. Roger Beattie, 1998. "Pension systems and prospects in Asia and the Pacific," International Social Security Review, John Wiley & Sons, vol. 51(3), pages 63-87.
    3. Habibah TOLOS & Peijie WANG & Miao ZHANG & Rory SHAND, 2014. "Retirement systems and pension reform: A Malaysian perspective," International Labour Review, International Labour Organization, vol. 153(3), pages 489-502, September.
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    Cited by:

    1. Zariyawati M. A. & Hirnissa, M. T. & Nurul-Farhanim, M. S. & Soh, W. N., 2021. "Determinant Factors of Health Financing Among Public and Private Sector in Malaysia," International Business Research, Canadian Center of Science and Education, vol. 14(12), pages 113-113, December.
    2. Saeed Solaymani & Negin Vaghefi & Fatimah Kari, 2019. "The Multidimensional Poverty Measure among Malaysian Employee Provident Fund (EPF) Retirees," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 14(5), pages 1353-1371, November.
    3. Jaafar, Roslan & Daly, Kevin James & Mishra, Anil V., 2019. "Challenges facing Malaysia pension scheme in an era of ageing population," Finance Research Letters, Elsevier, vol. 30(C), pages 334-340.

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