From Malay Mail · Ida Lim · · 1m 30s
How Malaysia's EPF could shift to automatic annuity with opt-out
Malaysia's EPF might adopt Singapore's CPF LIFE-style annuity with opt-out for retirement savings.
In brief
Malaysia's EPF might adopt Singapore's CPF LIFE-style annuity with opt-out for retirement savings. Malaysia could implement an automatic EPF annuity with opt-out option to improve retirement savings without changing current withdrawal rules. Originally reported by Malay Mail.
EPF annuity proposal
Financial planner Rajen Devadason suggested Malaysia adopt an insurance annuity scheme similar to Singapore's CPF LIFE with an opt-out option.
“At the International Social Wellbeing Conference 2026, financial planner Rajen Devadason suggested that Malaysia could benefit from an insurance annuity scheme similar to Singapore's CPF LIFE, provided it includes an opt-out option and allows current EPF withdrawal parameters”
Automatic enrolment model
The scheme would use automatic enrolment with a chance for people to opt out, making it politically palatable.
“He was speaking to Malay Mail at the sidelines of the recent Employees Provident Fund’s (EPF) International Social Wellbeing Conference 2026 (ISWC 2026)”
Retirement age considerations
Rajen noted that increasing retirement age to 65 without changing EPF withdrawal rules at 50, 55, and 60 would avoid political backlash.
“But if you then give people the opportunity to work longer, that funding between 60 and 65, if all of that flowed into an annuity, that might work, might help”
Private pension responsibility
Rajen stressed that individuals must build private pensions alongside the annuity to ensure sufficient retirement income.
“The whole purpose of working longer is that you can build a higher pile of retirement savings”
ILO specialist perspective
ILO senior social protection specialist Mariko Ouchi emphasized no universal retirement model exists, requiring country-specific solutions.
“Many people ask me what is the best model or good practice in terms of pension and old-age benefit in the world. And then I answer, all countries are having problems in one way or another”
Country-specific adaptations
Ouchi noted Malaysia must adapt its pension system to changing demographics, work patterns, and life expectancies.
“Countries also need to carry out a mid-term to long-term revisiting of their existing pension models, to see if it could continue running for decades unchanged or if substantial reforms are needed”
Periodic reviews needed
Ouchi recommended regular actuarial evaluations of pension systems every three to five years to adapt to demographic shifts.
“Countries go through many changes, such as the different work nature including international jobs done remotely; migration; demography; higher life expectancies; higher retirement ages; and higher pension access ages”
Retirement savings strategy
The proposal combines extended working years with private pension building to create multiple passive income streams for retirement.
“These funds should be used as capital to create multiple streams of passive income for retirement”
What happens next
Malaysia may implement an EPF annuity with opt-out option while maintaining current withdrawal rules for retirement savings.
“But by itself, it’s not enough. People must take personal responsibility. They have to build their own private pensions”
The one thing
Malaysia could implement an automatic EPF annuity with opt-out option to improve retirement savings without changing current withdrawal rules.
