Malaysia Case Study - How Incentives Can Boost Pensions For Informal Sector Workers

Overview

This case study examines Malaysia’s efforts to expand pension coverage among informal sector workers through several programmes managed by the Employees Provident Fund (EPF). The EPF covers around 50% of the labour force and holds over US$240 billion in assets, providing a strong platform to extend pension saving beyond formal employment.

Malaysia’s first informal sector initiative, the 1Malaysia Retirement Scheme (1MYR), launched in 2010 and achieved limited uptake. A revised approach was introduced in 2018 through the i-Saraan scheme, offering government matching contributions, recently increased to 20% from 2025. Participation has grown to over 500,000 accounts, though balances remain modest. Additional initiatives include i-Suri, which offers targeted matching contributions for low-income housewives, and i-Saraan Plus, which will link pension saving to gig-economy platforms.

Malaysia’s experience shows how strong national pension institutions, digital targeting, and well-designed matching incentives can expand participation among informal workers.