World Applied Sciences Journal 35 (8): 1620-1625, 2017 ISSN 1818-4952 © IDOSI Publications, 2017 DOI: 10.5829/idosi.wasj.2017.1620.1625 Corresponding Author: Puspa Liza Ghazali, Faculty of Economic and Management Sciences, Universiti Sultan ZainalAbidin, 21300 Kuala Nerus, Malaysia. 1620 Alternative Retirement Schemes in Malaysia: Way Forward for a Sustainable and Comprehensive Coverage for All Community Level Nik Hazimi Mohammed Foziah, Puspa Liza Ghazali, Mustafa Mamat and Fauzilah Salleh 1 2 1 2 Faculty of Informatics and Computing, 1 Universiti Sultan Zainal Abidin, 22200 Besut, Terengganu, Malaysia Faculty of Economic and Management Sciences, 2 Universiti Sultan Zainal Abidin. 21300 Kuala Nerus, Malaysia Abstract: Malaysia country now towards an ageing population, in which exposed to the longevity risk. People in Malaysia still lack awareness on preparing for their retirement. The mainstream retirement scheme, Employees Provident Fund in Malaysia has reported inadequate to sustain the elderly after working age. Therefore, the study aims to examine the alternative options available to the public to maximize their retirement incomes. The study found that the existing pension schemes still lack efficiency regarding investment, benefits allocation and do not provide coverage to all level of community members, in particular for those in the informal sector. Thus, the authority needs to revise the retirement system to keep elderly out of poverty line. Key words: Retirement System Pension Schemes Annuity Private Retirement Scheme INTRODUCTION alarming issues to raise awareness among Malaysian Malaysia has developed an excellent healthcare with the potential of poverty among elderly in future. system and advanced facilities to the public which In light of these issues, it can be an intriguing part to improved the rate of healthiness among the community in examine the alternative retirement savings options in Malaysia. In other sides, Malaysia now is experiencing a Malaysia. Thus, this study aims to analyze the existing longevity risk, as what happen in other developed retirement schemes as an alternative to the private sectors countries. Statistics have shown that for life expectancy to provide a sustainable and adequacy of pension’s at age 65 years, males in Malaysia were expected to live benefits to their retirement in futures. Then the study will for another 15 years and females 17 years [1]. Furthermore, propose the optimal features to be included in Malaysian the total of the population at age 65 age and above in retirement system to enhance the existing plans and 2014, was 5.6% from total Malaysian population and become the guideline to the prospect retirees, especially increased to 5.8% in 2015. This figure is estimated to be for young workers to early set up their retirement goals to 6% in 2016 out of the total population, which is nearly keep their welfare after retirement. reached 7% of the ageing country [2]. As retirement systems adopted in the world varies in On top of the ageing issue, people in Malaysia still designs, the primary classification given is either lack awareness to think about their retirement saving defined benefit or defined contribution [9]. In the preparedness [3]. Furthermore, about 70% of the 54-year- defined benefit plan, provides the employees with old EPF members have less than RM50,000 in their pension benefit by taking consideration of years of account [4] Li, Montalto and Geistfeld; Moore and services and most important things is the salary or wages. Mitchell; Yuh, Montalto and Hanna; Kim, Hanna and While the latter plan refers to the join regular contribution Chen [5-8] have pointed out the inadequacy of wealth made by the employer and employees to the retirement saving by the retirees to live in the retirement era. It is funds. Many countries nowadays have adopted these workforces and take attention by the authorities to cope