GEORGE TOWN, Nov 3: Human Resources Minister Steven Sim Chee Keong said the new 2% Employees Provident Fund (EPF) contribution for foreig...
GEORGE TOWN, Nov 3: Human Resources Minister Steven Sim Chee Keong said the new 2% Employees Provident Fund (EPF) contribution for foreign workers and employers is a fair and balanced move, aimed at ensuring social justice while enhancing Malaysia’s international reputation.
He said the 2% rate was set in line with International Labour Organization (ILO) standards and reflects Malaysia’s commitment to global best practices in labour governance.
Three Key Benefits for Malaysia
According to Sim, the contribution, which came into effect last month, brings three major advantages:
1️⃣ Reduced outflow of foreign currency — estimated savings of about RM1 billion annually.
2️⃣ Lower cases of job desertion among foreign workers.
3️⃣ Emergency financial support for workers during their stay in Malaysia.
A Savings Scheme, Not a Pension Plan
“This contribution is not a retirement scheme like that for Malaysian citizens,” Sim explained.
“It is a savings fund that foreign workers can withdraw upon returning home, or which can be accessed by their families in case of death or emergency.”
He added that while the EPF policy falls under the Ministry of Finance, the Human Resources Ministry aims to promote better public understanding of its objectives and social impact.
Commitment to Fair Labour Practices
Sim emphasized that the policy reflects Malaysia’s economic and social balance, and reinforces the government’s dedication to protecting foreign workers’ rights and promoting transparent governance.
He made the remarks during a session titled “Morning Talk with the Human Resources Minister” at the Tax Seminar for Budget 2026, organized by Grant Thornton, attended by more than 266 participants.
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