Professor Datuk Norma Mansor, the director of the Social Wellbeing Research Centre at the University of Malaya, said relying solely on the government is 'insufficient' as private companies can also do their part by investing in the ageing space, supporting communities, and developing innovative solutions for older individuals. (Photo by Suhaimi Yusuf/The Edge)

KUALA LUMPUR (June 5): The private sector has been urged to collaborate with the government to tackle the growing concerns over the anticipated ageing populations in the country.

Collective participation from various segments of society includes communities, non-governmental organisations (NGOs), and individuals themselves is essential to curb these issues, according to Professor Datuk Norma Mansor, the director of the Social Wellbeing Research Centre at the University of Malaya.

Norma emphasised that relying solely on the government is "insufficient" as private companies can also do their part by investing in the ageing space, supporting communities, and developing innovative solutions for older individuals.

"It is not just the government's [responsibilities], but also the private sector should be encouraged for them to be in the ageing space and also our communities and NGOs” Norma told The Edge on the sidelines of the International Social Wellbeing Conference 2024 (ISWC)

For instance, companies can invest in providing technology which plays a significant role in assisting the elderly with their needs, she noted.

Earlier on Tuesday, Prime Minister Datuk Seri Anwar Ibrahim, who officiated the ISWC, said during his opening speech that Malaysian government-linked companies including the Employees Provident Fund (EPF), Khazanah Nasional Bhd, and Retirement Fund (Inc) “have taken the lead in investing in ventures targeted at developing the silver economy in Malaysia”.

Looking forward, Anwar gave it a call for an active involvement coming from the private sector in developing products and solutions in this field in ensuring “no is left behind in the race”.

Adopting a multi-tier pension scheme is pertinent for the country

Norma added that there is also an urgent need for the country to fully implement a "multi-tier income" for Malaysia's citizens, with focus on having a contributory social pension (CSP) scheme.

The lowest layer of the proposed pension system, known as layer zero or tier zero, should be tax-funded by the government to the people, similar to an old-age pension or social pension.

"This should be universal [for everyone]. If the government wants to exclude the top 10-20% [income group], you can easily do that with administrative data that we already have with the LHDN [Inland Revenue Board of Malaysia] and also other agencies," Norma said.

The next layer should be the CSP mechanism where Norma proposes a national pension by which every Malaysian by the age of 18 should contribute or based on a specific cutoff year (eg, those born after 1980).

"The amount too does not need to be small; it can be big as well. So we should also be capped there. But at the end of 15 years, contributors would receive pension payouts [of the CSP]," Norma said.

“We have to [do it now] and we have to plan [and] prepare for it. Like I said, for it [CSP] to mature, at least we need 15 years for it [or] for the first payout to go,” Norma said.

The mechanism should function like insurance, where individuals receive returns based on their age. This approach fosters solidarity and ensures financial security for ageing citizens.

By any means, in addition to the basic pension and CSP, Malaysians would also receive benefits from their EPF (Employees Provident Fund) and PR (Public Retirement Scheme).

"So that is what we hope that Malaysia will have because other countries have that [policy] too such as Japan, South Korea, and Australia," Norma said. This is not a new policy amid aforementioned countries have successfully implemented similar multi-tier pension systems, she noted.