KUALA LUMPUR — The government is expanding structural reforms and financial incentives through the Employees Provident Fund (EPF) to buffer citizens against rising living costs and prepare for Malaysia’s rapid transition into an aging nation.
Deputy Finance Minister Liew Chin Tong outlined these proactive measures in the Dewan Rakyat today, detailing structural shifts in fund management alongside targeted rollouts aimed at informal, platform-based, and vulnerable worker segments.
The Three-Account Rebalancing Strategy
At the core of the state’s retirement adequacy strategy is the newly implemented restructuring of EPF member allocations into a three-account system. This framework was explicitly engineered to prevent a repeat of the massive retirement account depletion seen during pandemic-era emergency schemes.
By separating liquid emergency funds from long-term reserves, the EPF now channels the vast majority of ongoing contributions directly toward retirement security,
- Retirement Account (75%) – Upgraded from the previous 70% allocation to aggressively lock down and preserve long-term funds.
- Sejahtera Account (15%) – Preserved exclusively for conditional, life-stage withdrawals including housing, tertiary education, and healthcare.
- Flexible Account (10%) – A newly introduced liquid tier allowing members quick access to short-term emergency funds without disrupting their primary retirement baseline.
Extending the Safety Net: i-Saraan Plus and i-Legasi
To address the growing contingent of gig workers, the self-employed, and homemakers who lack structured corporate savings benefits, the government has launched and sustained several specialized voluntary programs.
Beginning this year, the government introduced i-Saraan Plus, specifically designed for platform-based e-hailing and p-hailing workers. The program offers annual matching incentives of up to RM600, subject to a lifetime maximum of RM6,000. To strengthen retirement security among vulnerable groups, existing programs like i-Suri and i-Sayang continue to encourage women and homemakers to build retirement savings despite not having fixed incomes.
Furthermore, the newly introduced i-Legasi initiative—launched on February 1 this year—allows EPF members aged 55 and above with retirement savings exceeding the Basic Savings threshold of RM650,000 to transfer part of their excess wealth to eligible immediate family members.
“As of now, 63 applications involving transfers amounting to RM46.3 million have been approved, benefiting 86 recipients,” Liew told the Dewan Rakyat.
Voluntary and Targeted Savings Initiatives Summary
| Program Tier | Target Group | Key Incentive / Structural Feature |
|---|---|---|
| i-Saraan Plus | E-hailing & P-hailing Platform Workers | Up to RM600 annual matching incentive (RM6,000 lifetime cap) |
| i-Suri & i-Sayang | Homemakers & Vulnerable Women | Encourages formal savings pipelines despite lack of fixed income |
| i-Legasi | High-Net-Worth Members (Aged 55+) | Intergenerational wealth transfers to immediate family members |
The Core Challenge – Rising Baselines vs. The 6.1 Million Vulnerability Pocket
The ministry’s aggressive structural changes have yielded quantifiable improvements among formal-sector workers. As of May 31, 2026, the number of active formal contributors aged 18 to 60 meeting their age-based Basic Savings benchmark (on track to reach RM390,000 by age 60) climbed to 3.04 million (38.3%), up from 2.71 million (35%) recorded in the same period last year.
| Year (As of May 31) | Active Formal Members Reaching Benchmark | Percentage of Category Cohort |
| 2025 | 2.71 Million | 35.0% (of 7.74M members) |
| 2026 | 3.04 Million | 38.3% (of 7.94M members) |
Despite this upward trajectory, severe systemic vulnerabilities remain. Port Dickson MP Datuk Seri Aminuddin Harun raised alarms over an estimated 6.1 million EPF members whose balances remain below RM10,000 due to Covid-19 emergency withdrawals. Aminuddin warned that this segment faces a profound risk of falling into a new tier of the “elderly poor,” noting many will be forced to extend their working lives by an additional four to six years just to recover.
Acknowledging the structural risk, Liew stressed that while account tweaking and matching incentives provide a critical buffer, the ultimate fix for retirement poverty relies on macroeconomic shifts.
“This is indeed a serious concern that the government shares. Moving the needle on retirement adequacy over the next decade will ultimately depend on achieving higher baseline wages and robust income growth across the entire Malaysian workforce.”
