The Evolution Of EPF Savings For Housewives In Malaysia
This isn't the first time the concept has been brought up.
One of the largest concerns of any household is whether they have enough savings. Whether it is for children’s education, a rainy day or even retirement, one of the most common financial problems we face is not having enough savings.
So, recently in the flurry of electoral campaigning, one of the promises by the opposition party, Pakatan Harapan, is to introduce compulsory Employee Provident Fund (EPF) accounts for housewives.
But this is not the first time EPF for housewives has been introduced.
Let’s take a look at the evolution of EPF savings for housewives in Malaysia:
Back in 2005, the EPF made a move which allowed husbands to contribute EPF on their wives’ behalf to their non-working spouse’s accounts.
“After all, the wife is the household manager and she deserves to be paid,” said former Deputy Culture, Arts and Heritage Minister Datuk Wong Kam Hong, back in 2005.
He said in an article in The Star, that it was a good idea to create a “pension fund” for the wife while the couple was young and able to contribute.
Voluntary savings scheme introduced
In 2010, housewives were encouraged to contribute to EPF in a voluntary manner under the 1Malaysia Retirement Savings Scheme – a government’s initiative to encourage the self-employed and those without a fixed monthly income to save for their old age.
“We are aiming to target and would welcome housewives to join in this scheme,” said Tan Sri Azlan Zainol, Chief Executive Officer of the EPF, back in 2010.
In addition to receiving the annual dividends from the EPF, contributors will also benefit from an additional 5 per cent government contribution, up to a maximum of RM60 per year over the next five years from 2010-2014.
Unlike the mandatory EPF Savings Scheme for employees, contributors are not compelled to deposit savings on a monthly basis but rather, when they can afford to. Contributors are allowed to contribute up to a maximum of RM5,000 per month.
Third time’s the charm?
Now, in 2018, Pakatan Harapan’s promise to open up EPF to housewives seems like a rather tired third attempt. In its election manifesto, PH had pledged to allow housewives to have an EPF account within 100 days of it taking over Putrajaya.
PH promises, as the federal government, to contribute RM50 per month for each housewife as a sign of appreciation, while two per cent would be taken from the EPF contributions of the housewives’ working husbands.
Datuk Seri Ismail Sabri Yaakob, also an Umno supreme council member and Rural and Regional Development Minister slammed this move (despite a predecessor from the same coalition showing his support).
“Does it mean that the wife is an employee of the husband to the point that contributions need to be paid? If need to pay, how should the contribution amount be determined?
“To pay contribution, we need to have a wage value. How should the salary of a housewife be determined?”
Will the third time be the charm? And is this a fair move for women for better financial independence upon retirement? Only time will tell.
What do you think of this third attempt to introduce EPF for housewives? Let us know in the comments.
Read more articles on savings here.