Proposal of pension fund for non-civil service servants

After fifty years of independence, based on my own observation in Malaysia, in the long run I think people who work in the civil service sector are better off than people who work in the private sector. True, indeed I think it is true.

Malaysia is still a young country and still learning. One thing for sure this country is still learning is that how to manage pension fund. After fifty years of independence, the country might not yet be able to gauge the good and bad about the existing practice of pension plan.

The reason why I think civil servants are better off is that civil servants get pension after they're retired. If they pass away during retirement, the pension will be paid to their spouse or children who are under 18. In that sense, their welfare is secured in the long term because their pension are 'unlimited'. I don't know how 'unlimited' is that, but for that reason alone the civil servants are better off.

Compared with the non-civil service servants, they will only receive their Employees Provident Fund (EPF) money which is limited, subject to how much fund they have accumulated during their years of work. Once the EPF money is finished, they are risking themselves to be financially stranded. For that reason alone, their welfare are not taken care of and therefore they are worse off.

Yes, I agree that the civil service servants pay might be not that attractive, but the 'unlimited' pension is a big incentive, if the information I have about government pension is correct. So if the civil servants think carefully about it, they should appreciate and committed to their job. There should be no more complaints about public services.

Therefore, I think it is about time for the government to think about the welfare of non-civil service servants. I reckon a big portions of them would be people who work in the factories or plantations. They are contributing to the economic growth of the country as well, so they should be rewarded with a good pension plan.

Based on my observation, the existing pension plan is not doing good enough to the retirees of private sectors. For example, I was informed that most of the retirees will finish consuming their EPF money within four to five years. It means that they have to be prepared to go back to work after five years after retirement. Who will take retirees?

Currently, the compulsory retirement age is 58 for the public sector. Assuming that the private sector is following suit, I doubt that employers will take the retirees back to employment. For many people, I believe it is difficult to absorb and digest.

As a result, it is about time for the government to take charge and lead the way regarding the pension plan for private sectors workers. In the UK for example, both public and private workers are entitled to national pension as long as they contributed sufficiently to the national insurance fund in terms of the amount of money and the duration of contribution. It means workers welfare are somewhat well-protected.

It is reasonable that the government should take care of labours, regardless of whom they are working for, as all of them are doing good to the nation. Currently, every worker and his/her employer are contributing to the EPF monthly.

My proposal is like this. I suggest that the government to chip in money into the workers fund, so that the private workers will have extra money in their pension fund. It means that the pension fund for the private sectors will consist of three sources instead of two, i.e. the workers themselves, their employers and the government. This fund will be accessible by the private workers only when they reach retirement age or disability. Basically, the private sectors workers will have more money in their pension fund. However, the government must not allow the private workers to use the money like they do now with part of their EPF money. That's the main purpose of the extra fund.

Although the proposal will increase the government expenses on pension, it is necessary and fair exercise. At least, those who are working hard in the factories and plantations will feel that the government appreciates their contribution. In fact, everyone will feel that the government is doing the right thing and looking after its own people. Furthermore, it gives incentive and motivation to local people to work hard. Otherwise, the country will be swamped with too many illegal immigrants which is already happening for so many years.