The Employees’ Provident Fund (EPF) is calling for the government to increase its contribution in the 1Malaysia Retirement Savings Scheme (Skim Simpanan Persaraan 1Malaysia, SSP1M) to cater to the increasing growth of labour in the ‘gig economy’. SSP1M is a government initiative to ensure self-employed individuals without fixed monthly income have a savings plan upon reaching retirement age. Currently, the government is contributing 10% with a maximum amount of RM120 per year to members of the scheme, on top of the scheme’s yearly dividend. EPF chairman Tan Sri Samsudin Osman said the growth of the gig economy, also known as the informal sector, has increased by 31% this year, outpacing the workforce in traditional jobs. “As the gig economy is rising at a faster pace than the traditional job market, individuals who seize work opportunities in the gig economy are often, inadvertently, left out from social security coverage,” he said.
EPF Deputy Chief Executive Officer (Strategy Division) Tunku Alizakri Raja Muhammad Alias said since there is no formal protection system for the self-employed who falls under the gig economy, there is a growing concern for a savings plan for when they retire. “EPF sees the exponential growth in the gig economy. That’s why we need to make sure that people understand the importance of retirement and how to prepare as early as possible. So financial literacy is a key sector,” Alizakri said.