Malaysia: 2022 Budget Offers
The Malaysian government delivered its 2022 budget in October 2021 with a range of measures intended to foster the country’s economic recovery in the wake of the Covid-19 pandemic. Themed as “Keluarga Malaysia, Makmur Sejahtera” (“A Prosperous Malaysian Family”), the budget is worth around RM332.1 billion, with expected revenues for the government reaching RM234 billion in 2022.
Malaysia’s Employees Provident Fund (EPF) has announced its support for Budget 2022, suggesting that its financial measures are conducive to ‘fostering economic recovery, improving livelihoods, as well as spurring employment, which can pave the way for Malaysians to rebuild their retirement fund’.
With those issues in mind, Malaysia’s 2022 Budget introduces several measures with specific consequences for the EPF. These include:
i-Saraan Extension
The government’s 15% contribution to the EPF voluntary contribution, known as i-Saraan, will be extended to include employees in the 55 to 60 age group. The i-Saraan voluntary contribution can be made up to a maximum of RM250 per employee per year, and also involves incentives for self-employed workers and workers in the informal work sector. Over 356 thousand employees in Malaysia are currently registered for i-Saraan voluntary contributions.
Minimum Contribution
During the coronavirus pandemic, the minimum statutory contribution to the EPF was set at 9%. The 2022 Budget extends that rate for another 6 months in order to help Malaysian workers manage the ongoing economic challenges. The extension will take effect from January 2022 (for February 2022 contributions) and last until June 2022 (for July 2022 contributions). After June 2022, the minimum contribution rate will return to 11%. Workers may opt-out of the reduced contribution rate.
i-Suri Contributions
The ‘Caruman Sukarela Insentif Suri’, known as the i-Suri, is a scheme that allows housewives and widows to make contributions, and save money, with the EPF. Under Budget 2022, i-Suri will be transitioned to Malaysia’s Social Security Organisation (SOCSO) and continue under the new name: Kasih Suri Keluarga Malaysia. By contributing to the scheme, housewives and widows that are registered with the eKasih system will gain access to social security benefits. eKasih is the Malaysian government’s National Poverty Data Bank System - an important resource for the implementation of poverty eradication programmes.
EPF Support
The Budget’s EPF measures have been well received by members of the fund’s governance team. EPF CEO Datuk Seri Amir Hamzah welcomed the Budget’s social protection measures, which include medical support, insurance schemes, takaful (Islamic insurance), and expanded support for children and the elderly:
“These efforts go some way towards addressing the shortcomings of the country’s social protection system for the vulnerable members of society, to ensure that they have access to at least a minimum standard of living, even during unprecedented times.”
Hamzah emphasized the scope of the EPF and its importance to the Malaysian people: “Given that our coverage extends to almost half of the Malaysian population, we will continue to work with the Government and related agencies in achieving social wellbeing for EPF members and Malaysians at large, in a manner that is transparent, inclusive, and in line with the ‘Keluarga Malaysia’ spirit.”
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