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By: Saidatulakmal Mohd
Arab Forum on Social Policy, Beirut, 28 – 29 October 2009
0.00
20.00
40.00
60.00
80.00
100.00
120.00Pe
rce
nta
ge
Years
Economic services Social services Security General administration
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Perc
en
tag
e
Year
Education and planning Health and family planning Housing Social and community services
Target Group And
Programmes:
ChildrenElderlyGeneral AssistanceFoster ChildrenDisabledGrantsNatural DisasterArtificial Body Parts
Widows & dependentsSchool assistance
Prisoners dependentsUnemployment benefits
Lump sum grantMonetary value, subsidy-in-kind,
Apprenticeship training & small business Launching grants
Monthly Allowance :RM100 per person or
RM700 per family
010,00020,00030,00040,000
50,00060,00070,00080,00090,000
1991 1992 1993 1994 1996 1997 2001 2003
Years
Num
ber
of B
enef
iciarie
s
010,000,00020,000,00030,000,00040,000,000
50,000,00060,000,00070,000,00080,000,00090,000,000
RM
(Million)
Number of Beneficiaries Expenditures
010,00020,00030,00040,000
50,00060,00070,00080,00090,000
1991 1992 1993 1994 1996 1997 2001 2003
Years
Num
ber
of B
enef
iciarie
s
010,000,00020,000,00030,000,00040,000,000
50,000,00060,000,00070,000,00080,000,00090,000,000
RM
(Million)
Number of Beneficiaries Expenditures
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
1991 1992 1993 1994 1996 1997 2001 2002 2003Widows and Dependents Eldely Unemployment Benefits Disabled
Elderly: largest groupReceiving social assistance
National Policy for Older Person 1990:
Old Folks above the age of 60Years who are destitute & do not
have any relatives – eligible for assistance of up to RM200 a month
“Create a society of elderly people who are centented and possess a high sense of self worth and dignity, by optimizing their self potential and
ensuring that they enjoy every opportunity as well as care and protection of members of their family, society and nation” (Government of Malaysia, 1996)
SOCIAL PROTECTION SYSTEMS :
Daripada keseluruhan 787 unit dibeli
Bumiputera
Daripada keseluruhan 787 unit dibeli
Bumiputera
PENSIONPENSIONSCHEMESCHEME
SOCIAL PROTECTION SYSTEMS :PENSION SCHEME
PENSION:i- Paid one month after retirement Ii- Paid monthly for the rest of life
GRATUITIES: i- Paid as a lump sum upon retirementIi- Paid lump sum
GOLDEN HAND-SHAKE:i- paid on the last day of job
Pension & grants dependents upon the length of service & last drawn salary
> 25 years entitled to a 50% replacement rate
< 25 years - based on theformula:1/600 X length of service X final monthly salary
Pensioners entitled free Health treatment in government’s Clinic and hospital
SOCIAL PROTECTION SYSTEMS :EMPLOYEE PROVIDENT FUND (EPF)
0
5000
10000
15000
20000
25000
30000
35000
RM (M
illio
n)
YearsContributions Withdrawals
Amount of Contributions to and Withdrawals from EPF
Established on1st October 1951
70%
1968 – First partial withdrawal scheme
Account 1
Account 2 30%
Pre-retirement
House acquisition
Medical
Education
Daripada keseluruhan 787 unit dibeli
Bumiputera
Daripada keseluruhan 787 unit dibeli
BumiputeraARMED FORCES
FUND (LTAT)
SOCIAL PROTECTION SYSTEMS :ARMED FORCES FUND (LTAT)
üü No restriction on withdarawals of No restriction on withdarawals of money from the fundmoney from the fund
üü Withdrawals will terminate the LTAT Withdrawals will terminate the LTAT membershipmembership
VOLUNTARY MEMBER:VOLUNTARY MEMBER:INTRODUCTION:INTRODUCTION:üü 1973 1973 –– Compulsory for members of Compulsory for members of
other rankother ranküü Contribution rate 10% Contribution rate 10% -- Employee Employee
& 15% & 15% -- GovernmentGovernmentüü Military Officer Military Officer –– Saving scheme & Saving scheme &
contribute Voluntarily to the fundcontribute Voluntarily to the fundüü Permit to withdraw to purchase a Permit to withdraw to purchase a
lowlow--costcost--house house –– Withdraw up to Withdraw up to 40% from the balance in the 40% from the balance in the accountaccount
üü Withdrawal at the age 50 & no Withdrawal at the age 50 & no monthly payment optionmonthly payment option
PENSIONABLE MEMBER:PENSIONABLE MEMBER:üü Receive a pension from Government Receive a pension from Government ––
Only receive the employee contribution Only receive the employee contribution upon retirementupon retirement
NON PENSIONABLE MEMBER:NON PENSIONABLE MEMBER:üü Would receive the employee Would receive the employee
contribution, governmetn contribution, governmetn contribution & other accumulated contribution & other accumulated benefitsbenefits
üü Can withdraw the entire saving from Can withdraw the entire saving from the fund 1 month after dismissal from the fund 1 month after dismissal from the armythe army
SOCIAL PROTECTION SYSTEMS :EMPLOYER’S LIABILITY SCHEME
EMPLOYER’S EMPLOYER’S LIABILITY LIABILITY SCHEMESCHEME
EMPLOYER’S EMPLOYER’S LIABILITY LIABILITY SCHEMESCHEME
Employment Injury Compensation(Workmen’s Compensation Act 1952)
Sickness Sick Leave Entitlement( Employment Act 1955)
Paid Sick Leave Entitlement(Employment act 1955)
Depends on length of service:< 2 years – 14 days2-5 years – 18 days> 5 years – 22 days
SOCIAL PROTECTION SYSTEMS :SOCIAL INSURANCE SCHEME
1. BENEFIT INCLUDES:• MEDICAL BENEFIT• EMPORARY DISABILITY BENEFIT• PERMANENT DISABILITY BENEFIT• DEPENDANT’S BENEFIT• DEATH BENEFIT• REHABILITATION BENEFIT
2. PROVIDE PROTECTIONS TO WORKERS FROM SKIM SERVICES DISEASE (PENYAKIT KHIDMAT) & ACCIDENTS DURING TRAVELLING ON WORK RELATED MATTER
3. TEMPORARY/DISABULITY – MINIMUM PAYMENT OF RM 8 P/DAY OR 80% OF WAGES
4. PERMANENT DISABILITY – MINIMUM PAYMENT OF RM8 P/DAY OR 90% OF WAGES AS WELL AS DEPENDENT BENEFITS
5. CONTRIBUTION RATE WAS 1.25% OF MONTHLY SALARY
1. PROVIDE COVERAGE AGAINST INVALIDITY OR DEATH DUE TO ANY CAUSE
2. BENEFIT RELATED TO TEMPORARY OR PERMANENT DISABILITY & REHABILITATION, FUNERAL, GRANTS, SURVIVOR’S PENSION & EDUCATION BENEFITS.
3. BENEFIT PAID OUT IN THE FROM OF PERIODICAL PAYMENT
4. PROVIDE 24 HOURS PROTECTION FROM DEATH OR INVALIDITY & OFFER PENSION BEFORE THE AGE OF 56
5. CONTRIBUTION IS 1%
EMPLOYMENT INJURY INSURANCE SCHEME INVALIDITY PENSION SCHEME
SOCIAL PROTECTION SYSTEMS :DISCUSSION
Redefining Family Values
Personal Saving
EPF, LTAT
Pension
SOCSO
Family Support
Concept of ‘balas jasa’ or repaying the parents
SOCIAL PROTECTION SYSTEMS :ADEQUACY OF RETIREMENT BENEFITS
SURVEYWithdrawn savings to coverexpenditure excluding medical carefor catastrophic illnesses – betweenRM510-RM1,000
PRUDENTIAL ASSURANCEMALAYSIA BHD
1,038 respondents area of KlangValley, Penang, Ipoh, JohorBharu, Kuching and Kota Kinabalu
35% respondents confident EPFand personal saving are sufficientto support their life when theyretired.
EPF
RAGAYAH
December 2006 – saving RM224 billionAverage : retiree receive RM475p/month - survive until age of 75 yearsold : Living in poverty
PLI –Penisular M’sia : RM530 p/mthSarawak : RM585 p/mthSabah RM685 p/mth
58.4% respondents coveredby insurance include 23.1%Of the low-income group
SOCIAL PROTECTION SYSTEMS :ADEQUACY OF RETIREMENT BENEFITS
Mismanagement
INADEQUACY
Withdrawal Schemes
Lump Sum withdrawal upon retirement
Depletion of accumulated savings
Continue working
SOCIAL PROTECTION SYSTEMS :GOVERNMENT EXPENDITURES
0
2
4
6
8
10
12
Perc
ent
ag
es
Years
Pension as a percentage of GDP
Pension as a percentage of operating expenses
0.000
0.005
0.010
0.015
0.020
0.025
0.030
010,000,00020,000,00030,000,00040,000,00050,000,00060,000,00070,000,00080,000,00090,000,000
1991 1992 1993 1994 1996 1997 2001 2003 2005 2007
Perc
ent
ag
es
RM (
MIli
on
)
Years
Public Welfare Expenditures Public welfare expenditure as a percentage to GDP
REFORMS AND STRUCTURAL CHANGES
Self Employed
Malaysia 2010 Budget23rd November 2009
Encourage to contribute in EPF
Rural area – Agricultural & Plantation Sector
Financial Support from children or live in poverty
Non-fixed income earners to contribute to EPF. For every RM100 contributed, Government contributes 5%
Retirement Age
Malaysia
Indonesia, Thailand, South Korea
Singapore
Increase from age 55 to 56 to 58 and …. 60Waste for the professional s& academicians
Retirement age at 60
Retirement age at 67
