Sosial Protection System For Older Persons In Malaysia

Ruhaini Hj. Zawawi

Director of Policy and International Relations

Department of Social Welfare, Malaysia

(Ministry of Women , Family and Community Development)

Co-author: Prof. Dr. Tengku Aizan Hamid

Malaysian Research Institute on Ageing (MyAgeing)

Regional Expert Forum on Population Ageing

12-13 Julai 2016, Bangkok, Thailand

22

CONTENTS

4

Population Ageing in Malaysia

Social Protection System in Malaysia

Mapping of Malaysia’s Pension System

Conclusion and Way Forward

• Diagram <15, 15-59, 60+

2035 60+ population reaches 15%

2020 65+ population reaches 7%

2020 Median age reaches 30 years old

2042 Proportion of 60+ exceeds

proportion of <15

2017 Peak of proportion of 15-59

age group at 65.6%

� Declining fertility and increasing longevity hascontributed to rapid population ageing.

� 1 out of 12 Malaysians are an older person in 2015.

� By 2020, it is expected that the number of older persons will increase to 3.3 million, making up about 11% of the total population then.

Older Persons in Malaysia, 2010 - 2040

Social Protection System in Malaysia

SOCIAL

PROTECTION

SOCIAL INSURANCE

Old age / Retirement Schemes (e.g. EPF,

Civil Service Pension)

Employment Injury Insurance (e.g. SOCSO)

SOCIAL ASSISTANCE

Cash or in-kind Transfers to the

Elderly, Disabled & Others (e.g. BOT)

Health Assistance (e.g. Universal Health Care)

Disaster Relief

LABOUR MARKET

INTERVENTION

Livelihood Programs (e.g. 1AZAM)

Skills / Knowledge Development

Programs (e.g. HRDF, Lifelong Learning)

• Major Institutions:

� Employees Provident Fund

� Public Service Department

� Social Security Organization

� Private Pensions

Administrator

� Department of Social Welfare

(Ministry of Women, Family &

Community Development)

� Ministry of Health

� Ministry of Human Resources

� Ministry of Housing & Local

Government

Mapping of Malaysia’s Pension System(Holzmann, 2015, p. 3)

• World Bank’s five-pillar

pension conceptual

framework

Social Protection for the elderly will be streamlined and

integrated to ensure better quality of life . The provision

of assistance will be continued based on basic needs.

The low income group, particularly In the informal sector,

will be encouraged to participate in voluntary savings and

retirement schemes to ensure economic protection

in their old age.

WAY FORWARD

Conclusion (Income Security in Old Age)

• Malaysia is not a welfare state and pursues “an active labour market policy and regards the role of social welfare services as marginal to the development process”.

• Universal social pension for the elderly is not sustainable in the long run.

• With the increase in the civil service mandatory retirement age and the Minimum Retirement Age Act 2012, there is an increase in the labour force participation rate of older workers aged between 55 to 60 years old.

• Minimum wages set at RM900 a month in 2012 (RM800 a month for Sabah & Sarawak) reinforces the security that comes with being employed.

• More has to be done to ensure the financial security of the lifelong poor and groups at-risk such as the disabled, frail / vulnerable who cannot work.

Conclusion

Vision 2020 - every citizen

of the country should be

given the opportunity to

realize their full potential

1Malaysia, People First,

Performance Now -

fairness to all and stresses

that no one’s group would

be left out or marginalized

Social spending will be

productive, not

consumptive and will

change the paradigm of

welfare assistance into a

form of investment.

The vulnerable group is

given every opportunity

and assistance to

participate in the labour

market and economic

activities to generate

higher income and

improve standard of living

ruhainiz@jkm.gov.my