Malaysia might face pensions crisis by 2050, Khairy warns

Youth and Sports Minister Khairy Jamaluddin warns that the government will have to fork out more for pensions with an expected increase in life expectancy. — File pic

PPUTRAJAYA, March 30 — Malaysia might be facing a potential crisis with pensions by the year 2050 due to a higher population of retirees coupled with higher life expectancy rates, Youth and Sports Minister Khairy Jamaluddin warned today.

Speaking at the Transformasi Nasional (TN50) dialogue session at the Finance Ministry here, Khairy noted that the government has to fork out more in terms of pensions as the population number of pensioners will almost double by then.

“Right now we have 9 per cent of the population above the age of 60. By 2050, we might have 16 per cent of the population above 60,” he said.

“Life expectancy is expected to increase to 100 years, so that means from retirement age the government has to pay pensions for 40 years,” he added.

He also said 65 per cent of active Employees Provident Fund (EPF) contributors have less than RM 50,000 in their accounts.

“These are some of the challenging questions we have to face,” he said.

He also noted that youth unemployment remained a problem, as highlighted in a recent report by Bank Negara Malaysia.

The central bank revealed that joblessness among the young was over three times the national average.

“So, though we are creating jobs, we are still seeing a mismatch between graduates and job opportunities,” he added.