Nearly four in 10 EPF members hit RM390,000 basic savings target

KUALA LUMPUR, 1 OCTOBER 2026 —

Kuala Lumpur: Nearly four in ten members of the Employees Provident Fund (KWSP) are currently on track to reach the RM390,000 Basic Savings Benchmark by the age of 60, a milestone that Prime Minister Datuk Seri Anwar Ibrahim described as a significant step toward ensuring retirement adequacy for the nation.

The Prime Minister stated that the government’s strategic objective is to elevate this proportion to six in ten members by the year 2030. While acknowledging the progress made, Anwar emphasized that a substantial number of Malaysians still face the risk of depleting their savings prematurely during a retirement period that is projected to last between 20 and 25 years.

He highlighted that social protection coverage remains a critical challenge, as millions of citizens work in the informal sector, while existing protection systems are primarily designed around formal employment structures. Anwar noted that as employment patterns shift, the national social safety net must evolve in tandem to remain effective.

The Prime Minister’s remarks were delivered via a read-out of his inaugural address by Second Finance Minister Datuk Seri Amir Hamzah Azizan at the International Social Welfare Conference 2026 (ISCW2026) held in Kuala Lumpur. In his address, Anwar underscored that retirement planning must address the financial realities of households, which frequently contend with daily cost-of-living constraints such as food, rent, and school expenses.

He argued that retirement security is fundamentally rooted in income, fair employment, and the consistent ability to save. Consequently, he stated that the wage agenda and the retirement agenda must move in parallel. Anwar called for raising the minimum wage threshold to ensure every Malaysian can age with dignity and safety, while simultaneously expanding opportunities to ensure that longevity remains meaningful.

KWSP Chairman Tan Sri Mohd Zuki Ali provided specific data to support the Prime Minister’s assessment, noting that the percentage of active formal sector members achieving the Basic Savings Benchmark according to age has increased from 36 per cent in June 2025 to 39 per cent in June 2026.

This three-percentage-point rise over a single year was characterized by Ali as a small but meaningful indicator that members are beginning to grasp the importance of savings adequacy. He expressed confidence that the establishment of clear benchmarks, communicated consistently, has the potential to alter member behavior in financial planning.

The Basic Savings Benchmark of RM390,000 serves as a critical metric for the fund, representing the minimum amount required to sustain a member’s standard of living throughout their retirement years. The increase from 36 per cent to 39 per cent reflects a gradual shift in financial literacy and planning habits among the formal workforce.

However, the Prime Minister’s comments highlight a persistent structural gap in the Malaysian economy, where the informal sector remains largely excluded from the robust savings mechanisms available to formal employees. This disparity poses a long-term fiscal and social challenge, as the aging population in the informal sector may lack sufficient resources to support themselves in old age.

The government’s target to reach six in ten members by 2030 implies a need for a further two-percentage-point increase in the next four years, building on the momentum of the previous year’s growth. This objective is intertwined with broader economic policies, particularly those related to wage growth and employment quality.

Anwar’s assertion that the wage and retirement agendas must move in sync suggests that future policy interventions may focus on enhancing disposable income to facilitate higher savings rates. By linking minimum wage adjustments to retirement security, the administration aims to create a holistic approach to social welfare that addresses both immediate living costs and long-term financial stability.

The International Social Welfare Conference 2026 provided a platform for these discussions, signaling Malaysia’s engagement with global best practices in social security and retirement planning. The presence of high-level government officials, including the Second Finance Minister, underscores the priority placed on this issue within the current administration.

The conference serves as a venue for sharing insights and strategies to tackle the complexities of an aging society, where the duration of retirement is extending due to increased life expectancy.

As the country moves toward its 2030 target, the focus will likely remain on bridging the gap between formal and informal sector workers. The evolution of social protection systems to accommodate changing employment patterns will be crucial in achieving the goal of universal retirement adequacy.

The data presented by KWSP indicates that while progress is being made, sustained effort is required to ensure that the majority of Malaysians can retire without the risk of financial depletion. The next phase of policy implementation will need to address the specific barriers faced by informal workers, ensuring that the social safety net is inclusive and resilient to economic shifts.

Related: Employees Provident Fund (KWSP)