The Minimum Retirement Age Act 2012 (MRA)
On 16th August, 2012, the Government published in the gazette “The Minimum Retirement Age Act 2012” for the private sector, and implementation date commenced on 1st July, 2013. According to the new ordinance, the retiring age of the private sector is extended to 60 years of age. The Government extends the retiring age to enable to deploy more experienced human resources for increasing the national productivity. According to census, the average national life expectancy is 75 years-old. Thus extending the retiring age would enable better national productivity, and national savings, as well as more accumulated living allowances.
EPF Contribution Age Extended
Following the extension of retiring age by the Government, EPF (KWSP) announced that effective from August, 2013, the contribution age was extended to 60 years-old.
Effective from August, for those earning below RM5, 000 month salaries until age – 60, are entitled to 13% contribution by the employer, and the employee’s contribution is 11%. For those earning more than RM5, 000 per month, the contribution from the employer will be 12%.
For those between 60 – 75 years old, earning less than RM5,000, the employer’s contribution is 6.5%, and the employee’s portion is 5.5%, and those above RM5,000, the employer’s contribution is 6%.
EPF further points out that, even though the retiring age is extended, the present policy of withdrawals for age groups 50 and 55 remain unchanged. There are members who have opted to withdraw from second account while reaching the age 50, and withdraw entire portion at age 55. However, EPF does not encourage members to withdraw entire amounts while reaching the age 55.