Malaysia's retirement fund KWAP insufficient for long-term pensions, says PM Anwar

Malaysia's national retirement fund, KWAP, is generating billions in investment returns, but these profits are not enough to sustain the country's long-term pension obligations. Prime Minister Anwar Ibrahim acknowledged this persistent challenge, noting it has been a recognized issue for over two decades.

"Even though the profits are large, reaching tens of billions, they are not enough to cover the long-term costs of pension needs," Ibrahim told the Dewan Negara. He emphasized that addressing this requires strong political will to balance the interests of civil servants and workers with the nation's financial capabilities.

The government has no plans to relax withdrawal rules for retirement funds, as a significant portion of contributors, currently 38%, have not met basic savings targets. Ibrahim stated that such measures could jeopardize retirees' financial security. However, he clarified that withdrawals are permitted for specific purposes, such as education or the Hajj pilgrimage, through the Flexible Account and the Sejahtera Account.

"Funds can be withdrawn. For example, 10 percent of savings in the Flexible Account can be withdrawn without conditions. That is the contributor's right to their savings," he said, refuting claims that funds are inaccessible. He also mentioned that 15 percent of savings in the Sejahtera Account can be withdrawn for specific needs. Despite these allowances, Ibrahim reiterated his stance against further easing withdrawal conditions, citing concerns for long-term contributor security.