KUALA LUMPUR: Malaysia is expected to be classified as an aged nation by 2043, with 14 per cent of its population being over the age of 65.
The Employees Provident Fund (EPF) said this is a result of increased life expectancy and declining birth rates.
By 2060, the ratio of working-age adults to elderly individuals will drop significantly to three to one, compared to ten to one in 2020.
EPF chairman Tan Sri Ahmad Badri Mohd Zahir said although longer lifespans reflect progress, the demographic shift will bring challenges to Malaysian society, especially in healthcare, aged-care facilities and retirement income security.
"A major challenge is the shifting employment landscape in the country, which is increasingly moving towards informal employment through gig work and self-employment.
"This growing segment, consisting of nearly four million workers, is at a greater risk of poverty in old age due to the lack of mandatory contributions to formal pension and retirement programmes," he said at the International Social Wellbeing Conference 2024 (ISWC 2024) here today.
Ahmad Badri added that to tackle some of these challenges, the government has supported and enhanced retirement savings for the informal sector through i-Saraan, which encourages voluntary contributions to the EPF.
"In line with the Ekonomi Madani goal of expanding social protection to all, the EPF is exploring further innovations to the EPF scheme to better accommodate the informal sector," he added.
The chairman mentioned that a recent measure involved restructuring the EPF accounts for members under 55, offering more flexibility for everyone.
Ahmad Badri highlighted that this strategy enables members to save for retirement while maintaining access to liquid savings for unforeseen emergencies.
Ahmad Badri stated that ISCW 2024 is a move towards developing an improved social protection system and society for everyone as Malaysia quickly becomes an aged nation.
He emphasised that the need for a comprehensive and sustainable social protection system is more urgent than ever.
"investing in social protection systems is crucial for the overall well-being of our society and it is our collective responsibility to ensure that no one is left behind," Ahmad Badri said.
The event was officiated by Prime Minister Datuk Seri Anwar Ibrahim and attended by EPF chief executive officer Ahmad Zulqarnain Onn, ministers, senior government officials, and members of the EPF board and investment panel.