Malaysia needs stronger protection system to prevent old-age poverty - Academician

KUALA LUMPUR, July 26 (Bernama) -- Malaysia needs a stronger national protection system in place to protect its citizens from old-age poverty, said University of Malaya's Social Wellbeing Research Centre (SWRC) director Datuk Prof Emeritus Dr Norma Mansor.

She said Malaysians could not afford to retire comfortably and need to be employed even after 60 years old like in Singapore. 

"Older people who are staying in the job are not taking over from the young. They are doing something different. Studies have shown it is not substitutability," she said during a session titled "Old-Age Poverty in Malaysia: Understanding the Societal Impact through Islamic Finance" here today.

The session was part of the half-day Invest Shariah Conference 2020 jointly organised by Bursa Malaysia Bhd and CGS-CIMB Securities Sdn Bhd.

Norma proposed a basic protection system that provides financial security post-retirement. 

"Even among those who are financially literate, they do feel financially insecure, and it’s the reason why Thailand introduced the old-age pension post-1997 crisis. When they (the Thai government) interviewed those in the middle-income group and slightly higher, (it was found that) they were insecure if there was no secure basic monthly income for them,” she said. 

Norma said the SWRC is recommending a multilayered retirement income, at least for the basic income.

This is shariah compliant, she pointed out, adding that the lowest layer of income should be tax-financed. 

"That is the basic responsibility of the government. The second layer that we propose is that make it compulsory for every Malaysian to have social security insurance similar to the Employees Provident Fund. It can be low; in Thailand, it is 500 baht (about RM61) per month," added Norma. 

-- BERNAMA