Today, Datuk Seri M. Saravanan, minister of human resources, planned to create a social safety net for private sector employees after they turn 60 through the Social Security Organisation (Socso).
The need for a social safety net
He proposed expanding the social safety net for private-sector workers by "switching" the current contribution scheme to a pension-like plan.
He said that private sector workers have no social safety net after retirement, unlike public sector workers who are protected by the government's pension scheme. According to him, the only social safety net they have is their contributions to the Employees Provident Fund (EPF), which they can withdraw at 55 and 60.
"Private sector workers contribute to Socso until they are 60. However, the day they become 60 and one day, they are no longer entitled to anything.
"Most chronic diseases come after 60, but they have nothing to claim by then.
"As such, I am looking at the possibility to increase the contributions for Socso, and after they turn 60, it becomes a pension-like scheme," he told the press today.
Malaysia to become an ageing nation by 2040?
Saravanan went on to say that he was currently conducting an in-depth inquiry into the matter. He said the pension-like scheme must be done and is not an option as Malaysia is turning into an ageing nation by 2040.
He noted that one of the difficulties in converting the current contribution scheme into a pension-like plan is the requirement for increased monthly contributions. He stated that the rate of monthly contributions was last increased in 1971.
When asked how long it would take to implement, Saravanan said, "For me to come up with the concept, it would be at least six months."
Update on Trade Unions' amendment bill
Meanwhile, Saravanan stated earlier in his speech that the government had held 14 extensive engagement sessions to gather stakeholders' feedback before the second reading of the Trade Unions (Amendment) Bill 2022, which is set to be tabled in Dewan Rakyat next month.
He stated that trade unions, employers' associations, and all state governments participated in the engagement sessions. He said the sessions were held in response to requests from stakeholders, particularly the Malaysian Trades Union Congress and the Malaysian Employers Federation.
"They requested for more sessions to be held before the second reading. Therefore, we have had 14 sessions to date.
"This clearly shows that the government is always open and takes into account the input and views from stakeholders in policy making and decisions, especially involving the welfare and wellbeing of employees."
Source: New Straits Times