Approaching 2020, most M’sians don’t have a nest egg

Most Malaysians cannot afford to retire

Anonymous_1406820656: Economist Jomo KS points out that current Employees Provident Fund (EPF) savings for most Malaysians are barely enough for a decent life after retirement. He adds that political interference is preventing EPF professionals from serving members’ interests better.

An increasingly higher portfolio risk profile is cause for concern, especially in foreign assets which are open to systemic manipulation (as in the case of the US subprime mortgage crisis from 2007 to 2010) and national projects.

Even the Singapore government’s wealth management companies GIC and Temasek have not been able to escape losses from foreign investments.

I am most keen to know whether EPF has been making adequate provisions for potential write-downs and whether all investment incomes are from realised gains. Can someone shed some light on this?

Dahjadi Bubur: No retirement fund in the world will be able to outperform costs of living forever; it is an obsolete concept that has served its purpose over the early years but is now on its way out. It is exactly like an oil palm or rubber tree with reducing yield due to age.

The EPF was, and still is, the safest fund to invest in but, in a land of clowns, goons and thieves, it will be losing its lustre sooner.

David Dass: The inadequacy of Malaysians’ savings when they retire is a big problem. Have studies been done to see how they manage?

Jomo says that despite the EPF broadening its investment base, the incremental return is only marginally higher. What should EPF do? Can employers make higher contributions? Can employees afford higher deductions?

He makes the point of household debt making the problem worse. How should that problem be addressed? Should the government simply declare a BR1M dividend large enough to clear some of that debt?

Are foreign workers the problem? In the UK, there was the feeling that cheaper foreign workers had depressed wages. This is probably true of Malaysia as well.

And finally, is this the middle-income trap – largely a factor of low productivity which itself is the result of poor standards of education? Is the problem exacerbated by Malaysia masquerading as a low-cost investment destination?

How do our people fare at the lower level of the wage stream? Are there short-term solutions to the problem?

Clever Voter: This is the irony. We claim that we will be a high-income nation by 2020. But if more than two-thirds of EPF contributors do not have adequate savings when they retire at 60, we should be concerned.

It is obvious slow adjustments in salary for those in employment has had a detrimental impact. The negative consequences of a low-salary policy are obvious. It makes sense to move the retirement age to 65 or 67 but we forget the structural changes that are taking place in the industry.

Adjusting to higher-value work that involves innovation will not happen overnight. Besides, such industries will require fewer of these talents, compared to manufacturing. Many manufacturing plants are employing cheaper foreign workers or have moved to countries with cheaper sources of labour.With higher costs expected, the greying workforce faces a challenging future.
S’pore PM gets Rose Garden treatment while Najib gets naught

Ace: State assemblyperson Howard Lee claims that Singaporean PM Lee Hsien Loong’s recent visit to the White House had dealt his Malaysian counterpart Najib Abdul Razak a “diplomatic sucker punch on the international stage”.

It is most futile to compare a durian and a langsat. One is a prime minister who is well-respected (despite whatever criticisms that may have been levied against him) and who takes the interest of the country he leads seriously and treats his subjects fairly, albeit harshly, at times.

The other is not-so-well respected and has a massive accusation hanging over his head which he is unwilling, or unable, to rebut conclusively and satisfactorily. He also appears to be protecting his henchmen’s interests more than the country’s.

Additionally, allowing his party members and leaders to play up racial and religious sentiments has definitely wiped out whatever proclamations of fairness that he may have made. How to compare?

Kim Quek: Najib’s shameful meeting with US President Donald Trump and its humiliating international media coverage have demonstrated beyond any doubt that the baggage-laden Najib is an albatross that the nation can ill-afford, both internationally and at home.

State assemblyperson Lee is right; the only way to be free of this deadly burden is for the people to choose a new government in the imminent general election.

Mytake: What is telling between the two leaders is that Singapore Airlines actually signed a deal with Boeing worth almost US$14 billion,

Najib’s deal for Malaysia Airlines with the same company is only a promise at this point. He thinks Trump is one of his rakyat; make promises, worry later.

Kingfisher: Going by the protocol accorded, our prime minister was unfortunately and seemingly disadvantaged compared to Hsien Loong.

And it seems Trump was sufficiently conversant with background briefings to be shrewd enough and demonstrate accordingly which of the two missions was for mutual national interests.

Malaysia4All: The difference between Singapore’s and Malaysia’s reception by the White House could simply be due to the fact that Najib did not want to be at a joint press conference where he could be asked any question at all by the reporters about 1MDB, because he would then have been unable to answer any of them with a straight face.

Better to have a hush-hush meeting with Trump, without the opportunity for any reporter present to ask a simple question.

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