Budget 2010: Responses

LIAM:

• Micro insurance: insurance not only for high-income earners; will work with authorities to launch the scheme
• RM1,000 tax relief on annuity: by 2020, 10% of population age >60 years; investment income earned in annuity fund should be tax free.
• Insurance penetration rate will improve, currently 41%

Source: LIAM

PIAM:

• Restructuring of motor insurance cover for 3rd party liabilities is necessary
• Lead to ultimate deregulation and liberalisation of motor and fire tariff

Source: Business Times

EPF:

• 1Malaysia Retirement Scheme will benefit 2 mil self-employed and non-wage earners
• Only 18% of 5.72 mil active members have enough savings to finance their retirements
• 40% of active members chose to contribute at 8% instead of 11%

Source: Bernama

Insurers are cut off from EPF pension scheme

Insurance companies will not be involved in the proposed EPF pension scheme. The scheme will be managed by EPF.

The proposal for such a scheme will be ready in 4 months' time.

The proposed scheme would be compulsory for new members, for existing members, it is optional. There will be health benefits in the proposed scheme. Pension payments will be linked to last-drawn salary.

Source: The Star

Earlier stories:

Pension scheme for private sector employees

Views on EPF Pension

Views on EPF Pension

Various parties have provided their views on EPF pension:

Federation of Malaysian Unit Trust Managers

Believes it can play an important role in helping the people plan early for their retirement.

LIAM

Looks forward to discuss further with relevant parties to design a suitable retirement scheme for the private sector employees.

MTUC

Should have a minimum monthly pension (e.g. RM700) to take care of low-income contributors.

CAP

Against private companies running the scheme, EPF should run it, and it should be a voluntary scheme.

NUBE

Rejects the scheme.

Source: The Star 1 & 2

Pension scheme for private sector employees

The Human Resources Ministry is drafting a working paper for the Finance Ministry on a pension scheme for private sector employees. The aim is to ensure EPF savings last a lifetime.

The working paper would be ready in the next few months.

Source: The Star

22% opt to maintain EPF rate

22% or 1.23 mil out of the 5.64 mil EPF members chose to maintain their contribution rate at 11%.

By default, if a member does not submit a form to maintain his contribution rate at 11%, his contribution rate will be reduced to 8% for years 2009 and 2010.

Source: The Star