By LOH FOON FOONG
Pensioners are having it tough, with 46,000 or 10% of them living below the poverty line. Some organisations are asking for a review of this and a higher minimum pension so they do not have to depend on charity.
THE recent salary increase for civil servants has brought cheer to many. The generous percentage of pay rise the Government has given was beyond the expectations of most people.
While most pensioners will also be benefiting from the pay rise and are grateful for it, thousands are still struggling to make ends meet or are living in poverty despite the 35% increase, said the Malaysian Government Pensioners' Association secretarygeneral Husain Anjang Pulau.
He said 46,000 or almost 10% of pensioners are still living below the poverty line income (PLI).
Pensioners who were receiving pension below RM500, with 196 of them less than RM200 before the pay rise, will now receive less than RM675, which is still lower than the PLI RM687 and RM698 for urban and rural areas respectively, as determined in the Ninth Malaysia Plan 2006-2010.
“Many of them are living in terrible conditions. They cannot cover all expenses such as house rental, utility bills, food and transport. Some manage to get part-time jobs but others are too sickly to work,” he said, adding that the association would like to meet up with the Prime Minister to iron out issues that have not been considered.
The Malacca branch Malaysian Government Pensioners' Association deputy president S. V. Vijayathevan said 60% of pensioners in Malacca who were getting between RM200 and RM500 a month did not benefit much from the pay rise effective July 1.
They cannot afford to buy the needed health supplements or medication that are not provided by government hospitals, he said.
The lowest paid pensioner that he knows of is getting RM180 and although the 35% increase was high, the quantum was low and the man will receive only RM243.
On what other ways low wage earners can plan for their retirement, Husain said they should also save through cooperatives. Contributing RM30 or RM50 a month to cooperatives is not much, but in the long-term, retirees do gain a lot from the interest earned, he said.
He also urged retirees to work part-time or be involved in some kind of activity.
“Working part-time could help alleviate poverty in material terms as well as of the mind,” he said.
Malaysian Trades Union Congress secretary-general G. Rajasekaran said private sector low wage earners have little savings and can only rely on the EPF when they retire.
While most contributors use up their savings within three years, RM70,000 in EPF (Employees Provident Fund) savings is too little when stretched over 20 years, he said.
“They'll receive RM291 a month and that's not enough for rental for a low-cost house,” he said.
Rajasekaran said MTUC had proposed to the government that EPF contributions from employers (12%) and employees (11%) be increased to 17.5% each to address the problem of inadequate retirement funds.
This would also enable them to withdraw a bigger sum when they buy a house, he said.
EPF should also find ways to invest and give better dividends to those with savings below RM100,000 at the time of withdrawal to encourage them to continue saving with EPF while taking out dividends to be used, he said.
If they are able to give 8% dividends, a person with RM70,000 savings will receive RM5,600 a year, he said.
“We used to ask EPF, how is it that Amanah Saham Nasional and the Armed Forces Fund could give 8% or more in dividends but not EPF? We were told that the Government gives share option scheme preferences to bumiputras and bumiputra companies while EPF is not given the same privilege.
“This should be considered for those with less than RM100,000 in their EPF,” he said.
Having adequate retirement funds also hinges on having enough to save and the Government has to seriously consider setting a minimum wage, he said.
In 2000, MTUC had proposed to the Government a RM900 minimum wage for Malaysia, based on basic living expenses of a single individual, he said. However, Yayasan Strategik Sosial executive director Datuk Dr Denison Jayasooria has called for the figure to be set at RM1,500.
“The Government says that we cannot have minimum wage because we will price ourselves out but the competitiveness report showed that countries which paid much better wages have higher productivity, he said.
“Paying decent wages would get people to value their job, create better purchasing power and reduce the need for investors to look for export market,” Jayasooria said.
The lack of minimum wage has also left retirees without jobs. Jobs that they used to be able to do in the past such as being a security guard or manning petrol kiosks have been taken over by cheap foreign labour, he said.
“Job security for retirees is worse now compared with 15 years ago,” Jayasooria said.
On boosting financial and educational aids for the poor, which could prepare them for life, he said with a decent minimum, people could take care of themselves without the need for handouts.
“Why do you want to give them so little that they have to depend on charity? The Government asks why we keep harping on this issue. It's because it's a very basic need,” he said.
In response to EPF's recommendation that employers who have not contributed EPF to contribute a minimum of 6% for those above age 55, MTUC recommended 11% contribution be incorporated in collective agreements.
National Council of Senior Citizens Organisation Malaysia president Lum Kin Tuck said he had proposed to the Women, Family and Community Development Ministry for a social pension of US$2 a day (RM240 a month) for those above 60 years old as a means towards poverty eradication.
This would benefit the handicapped and those who could not save enough for old age, he said.
There will be 1.2mil senior citizens who will benefit from the proposal if approved, of which more than half are Malays, he said.
To ensure income adequacy at retirement, the poor must try and get a good education and the community must step forward to help them, he said.
“The rich should set up foundations, like they do in the United States and contribute a lot to social work,” he said.
Correction from The Star
03 June 2007