EPF tiered dividends may not be progressive: Ong Kian Ming

Adjunct professor Dr Ong Kian Ming, from Taylor's University, has expressed concerns that a tiered dividend structure for the Employees Provident Fund (EPF) may not be the most progressive approach to ensure members have sufficient retirement savings. Although the concept has been proposed before, its implementation could potentially erode confidence in the retirement fund.

Dr Ong noted that a tiered system could result in higher early withdrawals from accounts held by higher-earning members, and may also lead to a reduction in self-contributions. He suggested that the EPF is likely to be cautious about implementing such a change without fully understanding the potential reactions it might provoke.

The CGS International ESG and Sustainability Conference 2026 provided a platform for Dr Ong to share these views. Khazanah Research Institute (KRI) had previously recommended a progressive dividends model as part of a broader reform of the retirement ecosystem, which included extending the retirement age and deepening progressive contributions.

Dr Ong expressed concurrence with these suggestions. He also proposed a deeper understanding of retirees' living arrangements to better tailor the cost of living for this demographic group. However, Dr Ong highlighted a gap in policy discussions surrounding intergenerational engagements on providing and caring for elderly parents.

The current policy proposal, he pointed out, is limited to a government plan that might allow parents to sue their children if they fail to provide adequate care. In May, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi mentioned plans to introduce a new law to ensure children care for their elderly parents, with the proposal to be presented to the Cabinet within six months.