KUALA LUMPUR: As the world faces an unprecedented demographic shift, with populations living longer and birth rates declining, Malaysia has been highlighted by the World Economic Forum (WEF) as a leading example of how emerging economies can navigate and reform retirement systems in response to the ageing population.

The newly released white paper, Future-Proofing the Longevity Economy: Innovations and Key Trends, maps out global innovations designed to strengthen financial resilience across societies, and showcases Malaysia’s Employees Provident Fund (EPF) as a standout case study for proactive retirement reform.

“Malaysia’s approach exemplifies how middle-income nations can balance flexibility, inclusion and sustainability in retirement savings,” the WEF paper noted.

Malaysia's Bold Steps: Reforming Retirement in a Changing World

The EPF – which serves over 16 million members – was commended for several strategic moves:

• Introducing a three-account structure in 2024:

o 75% for retirement
o 15% for conditional withdrawals (housing, education)
o 10% for a flexible emergency-access account

70% of contributors opted not to use the flexible account, indicating a commitment to long-term savings.

• Expanding retirement coverage to informal workers via i-Saraan:

o With a 20% government matching incentive (up to RM500), participation grew by 53% from 2023 to 2024.

• Enhancing financial literacy, portability, and efforts to include migrant and gig workers in the formal retirement ecosystem.

Despite these strides, Malaysia still faces the challenge of bridging the 40% coverage gap in retirement protection among its informal workforce – a hurdle shared by many emerging economies.

Key Global Takeaways

Here are 6 major insights from the WEF report that aim to future-proof the global longevity economy:

1. Build Resilient Public Retirement Systems

Reform pension systems to remain solvent, equitable and inclusive — especially as the number of retirees surges.

2. Rethink Retirement from Accumulation to Decumulation

Shift the focus from just saving to turning those savings into predictable lifetime income.

3. Make Employers Central to Financial Well-being

Employers should help workers of all ages build long-term financial security — including emergency savings and portable benefits.

4. Support the Economics of Caregiving

Recognize and compensate both formal and informal carers, especially as ageing populations increase the demand for long-term care.

5. Harness Technology and AI

Use digital platforms and AI to personalize financial planning, enhance access, and support healthy ageing and caregiving.

6. Promote Inclusive Growth and Equity

Address gaps in financial resilience across gender, class and employment status, and support lifelong skill-building.

The WEF report warns that without bold reform and innovation, societies risk entering a future of financial instability, overwhelmed care systems, and intergenerational tension.

Yet countries like Malaysia demonstrate that with political will and smart design, it is possible to create more resilient and inclusive systems that support people through longer, multistage lives.

“The longevity economy is not a future scenario — it is already here,” the paper concludes. “Stakeholders must act now to shape it, not simply react to it.”