Industry leaders have hailed the passing of the Employees Provident Fund (EPF) (Amendment) Bill 2025 as a transformative step toward strengthening social security while ensuring business sustainability.
The Malaysian Employers Federation (MEF) described the move as a "balanced approach" that alleviates financial burdens on businesses while enhancing Malaysia's economic competitiveness under the Malaysia Madani Economy Framework.
MEF president Datuk Dr Syed Hussain Syed Husman emphasized that the revised EPF contribution framework for non-citizen employees will foster industrial resilience, increase productivity, and spur economic growth. "This policy ensures business continuity and supports the long-term financial security of foreign workers," he said.
He stressed that controlling cost increases is crucial for maintaining business sustainability and keeping Malaysia on track to rank among the world's top 12 most competitive nations. He also urged continuous stakeholder engagement to refine EPF contribution rates, ensuring the interests of both employers and employees remain protected.
Beyond financial relief, the MEF believes the structured savings plan for foreign workers will improve retention rates, stabilize the workforce, and enhance productivity in key industries such as manufacturing, plantations, construction, and services. "A robust workforce directly contributes to a stronger GDP, attracting both local and foreign investments while bolstering Malaysia's global competitiveness," Syed Hussain added.
Boosting Industrial Resilience & Retention
Echoing similar sentiments, Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai noted that extending social protection to all workers could reduce turnover and cultivate a more engaged workforce.
Soh pointed out that accumulated EPF savings could serve as an incentive for foreign workers to return home after completing their contracts rather than seeking extended or illegal stays. "The government should ensure strict compliance, making it mandatory for foreign workers to be legally documented at the time of withdrawal. This will prevent unauthorized access to funds and uphold immigration and employment laws," he said.
While supporting the initiative, Soh underscored the importance of closely monitoring its impact on business competitiveness and cost structures to maintain Malaysia's appeal as an investment hub.
i-Saraan Contributions Hit Record RM2.6 Billion in 2024
In a related development, Finance Minister II Datuk Seri Amir Hamzah Azizan announced a record-breaking RM2.6 billion in contributions under the voluntary EPF scheme, i-Saraan, in 2024. The government's incentive allocation alone surged to RM114.8 million, benefitting 529,667 members—nearly double the RM54.7 million allocated in 2023.
"In 2023, total i-Saraan contributions amounted to RM1.44 billion, a significant jump from RM888 million in 2022. This growth underscores the increasing commitment of Malaysians to securing their financial future," Amir Hamzah stated.
The government has further enhanced i-Saraan incentives under Budget 2025, increasing the matching contribution rate from 15% to 20%, capped at RM500 per year, with a lifetime limit of RM5,000 for individuals under 60.
Meanwhile, participation in the i-Suri EPF scheme also soared, with 75,196 members receiving incentives totaling RM11.4 million in 2024—marking a 77% increase from 42,759 recipients in 2023. The i-Suri scheme provides a 50% matching contribution for every ringgit saved, up to RM300 annually, with a lifetime cap of RM3,000 for individuals under 55. With these progressive measures in place, Malaysia's EPF reforms are poised to create a more secure, competitive, and financially stable workforce—fueling economic growth and business confidence in the years ahead.
