Prime Minister Datuk Seri Anwar Ibrahim said that the Cabinet will discuss a proposal to increase employers’ contribution to the EPF funds.
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While it may seem like good news to many that the government will soon discuss increasing employers’ Employees Provident Fund (EPF) contribution, many are also worried that this may affect the take home pay of Malaysians with smaller incomes.
Twitter user @QusyairiH said:
This will end badly. Employers will be reducing the salary in order to be able to contribute more to EPF. Less profit for companies, less take home pay for employees. Nobody will be happy. And this might also impact foreign investments in Malaysia.@QusyairiH via Twitter
Another Twitter user @pizzadren too chipped in similar thoughts.
Damn, high pension funds percentage may also lead to lower take-home salaries. Not sure if companies would agree with that without lower salary adjustments.@pizzadren via Twitter
Others suggested that the government should look into the issue of low salaries instead.
Twitter user @saufydoffy said:
Good suggestion for the EPF, but i think let’s aim to increase the minimum wage first.@saufydoffy via Twitter
Meanwhile Twitter user @theonlymirul said:
I’m all for higher EPF contributions , but I’m concerned with the after effects. Payroll cost will rise & possibly lead to higher product prices. 20% is too much at this time but 15% sounds more reasonable.@theonlymirul via Twitter
On the other hand, Twitter user @prasys suggested the government consider one of New Zealand’s policies where once a certain amount of contribution is reached a year, the government pays an extra RM500 as contribution.
Prime Minister Datuk Seri Anwar Ibrahim earlier said that the Cabinet will discuss a proposal to increase employers’ contribution to the EPF funds following calls by workers for employers to contribute 20% towards the fund.
As reported by Malay Mail, he told reporters when met at the federal-level May Day celebration yesterday:
It was brought forward to us but the Cabinet will discuss this because it will have an impact on the government’s policy and also to the employers so it will have to wait before making any decisions.Prime Minister Datuk Seri Anwar Ibrahim
It was also reported that Uni Malaysia Labour Centre (Uni-MLC) had urged the government to increase the employers’ EPF contribution to 20% from the current 13% for those earning RM4,000 and below.
According to reports, its president, Shafie BP Mammal, said the increase is necessary to ensure that contributors will have adequate savings in their EPF accounts when they retire.