Ensuring Business Sustainability, Talent Retention Via EPF Reforms
Industry leaders welcomed the passing of the Employees Provident Fund (EPF) (Amendment) Bill 2025, believing that it is a balanced approach that strengthens social security while ensuring business sustainability.
For one, the Malaysian Employers Federation (MEF) lauded the move, emphasising that it provides financial relief to businesses and enhances Malaysia’s economic competitiveness under the Malaysia Madani Economy Framework.
MEF president Datuk Dr Syed Hussain Syed Husman said that the policy provides substantial financial relief for employers, ensuring business continuity while supporting foreign workers’ long-term financial security.
“MEF views the EPF contribution for non-citizen employees as a balanced approach to enhance industrial resilience, employee productivity and economic growth over time. It is critical to control cost increases to ensure business sustainability and enhance Malaysia’s competitiveness in line with the goal of placing Malaysia among the top 12 most competitive countries in the world, as envisioned under the Malaysia Madani Economy Framework,” he explained.
Syed Hussain also stressed the importance of continuous stakeholder engagement before implementing future changes to EPF contribution rates, to ensure that both employer and employee interests are protected.
He added that MEF remains committed to collaborating with the government and relevant agencies to support upskilling and reskilling initiatives, particularly for local workers to reduce dependency on foreign labour.
The federation also believes that the structured savings mechanism for non-citizen employees will lead to better retention rates, workforce stability and improved productivity in key industries such as manufacturing, plantations, construction and services.
“With resilient businesses and a more productive workforce contributing to higher gross domestic product (GDP), this would lead to increased investments, both local and foreign direct investment (FDI) and strengthened competitiveness in the global market,” he continued.
Meanwhile, the Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai mentioned that in the long run, ensuring equal social protection across for all workers could support Malaysia’s industrial resilience by improving worker retention, reducing turnover and fostering a more engaged workforce.
He highlighted that the EPF savings accumulated under the scheme could incentivise foreign workers to return home upon completing their contracts rather than seeking to stay on legally or illegally.
“The government should also make it a strict condition that foreign workers must be in legal status at the time of withdrawal. This would prevent undocumented workers from accessing the funds and further reinforce the objective of ensuring that only those who comply with immigration and employment laws benefit from the scheme,” he added.
Soh also stressed that the impact on business competitiveness and cost structures must be closely monitored to ensure Malaysia remains an attractive investment destination.
i-Saraan Contributions Reached RM2.6 Bil in 2024
Meanwhile, the voluntary scheme under EPF, i-Saraan, had disbursed a total of RM2.6 billion worth of contributions in 2024 and that out of the amount, the government’s incentive allocation was RM114.8 million to benefit 529,667 members.
“This marks a significant increase compared to the government’s incentive of RM54.7 million for 383,082 members in 2023 and RM33.2 million for 291,743 members in 2022. As a result, total contributions received for i-Saraan in 2023 amounted to RM1.44 billion compared to RM888 million in 2022,” said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He further explained that the government announced enhancements to the i-Saraan programme, including an increase in the matching incentive from 15-20%, subject to a maximum of RM500 per year and a lifetime limit of RM5,000 per individual under Budget 2025, eligible for individuals under the age of 60.
At the same time, Amir Hamzah reported that 75,196 members have received government incentives totalling RM11.4 million under the i-Suri EPF scheme and the number of recipients increased 77% compared to 42,759 members in 2023.
The incentive rate for i-Suri in 2024 is a matching contribution of 50% for every ringgit contributed to the EPF with a maximum incentive of RM300 per year, subject to a lifetime limit of RM3,000 per individual under the age of 55.
In another development, Amir Hamzah also announced that the number of contributors with basic savings has increased by 7% in 2024 to 37.3% (2.75 million members).
