Does the Employees Provident Fund Provide Adequate Retirement Incomes to Employees?

The objective of this study is to delve further the Malaysia’s Employees Provident Fund (EPF) scheme by exploring the perceptions of 300 existing and prospective retirees in total on the existing EPF system that provides them with the adequacy of incomes in retirement. By employing the logistic model in this study, the perceptions of 250 retirees and 50 currently working employees, in particular, were evaluated as part of the overall assessment on the strategic pathway of the EPF system towards becoming the reliable financial security guarantor for elderly workers. Among others, there are relatively similar results regarding key factors to have substantial effects on the retirement income adequacy being prevailed in the cases of existing retirees and prospective retirees. Key factors namely the number of dependent persons, averaged non-EPF savings, housing loan, car loan and medical expense are found to be negatively related to retirement income adequacy. Therefore, necessary improvements on the existing EPF scheme need to be implemented so that the provision on accumulated financial resources of both existing and prospective retirees aimed at ascertaining appropriate adequacy levels in retirement incomes can be monitored in a timely manner.