The Waqf Integrated Financial Instrument of Pension Model in Malaysian Social Security: A Conceptual Proposition
Keywords:Pension scheme, Waqf, Ageing population, Savings, Employees’ provident fund
The ageing population trend is a problem for almost all countries in the world. In Malaysia, the issue is exacerbated by insufficient employee savings to face retirement. The majority of Malaysian employees have savings no more other than mandatory savings of the Employees Provident Fund (EPF) account. On the other hand, waqf has many roles in the country’s economic development as it helps to improve welfare of the community. This paper aims to connect the gap between pension and waqf issues through a new proposed Waqf Based Pension Model. This study uses descriptive analysis to propose a Waqf Based Pension Model. This study employs library research approach to collect secondary data from journal articles, books, reports, and websites that contain existing pension schemes and waqf. This new model improves weaknesses in the existing pension scheme using annuity-based calculations. This study finds that productive waqf assets may be used to generate greater profits. In addition, waqf funds are then allocated to build the infrastructure needed by the community such as health services, education, housing, transportation and religious facilities. The new Waqf Based Pension Model is expected to be supported and applied by the government and the community.
Ab Malik, N. M. A. N., Ismail, M. A. & Shahimi, S. (2015). Penyisihan Sosial dan Penyelesaiannya Melalui Mekanisme Filantropi Islam. Jurnal Muamalat, 8, 77-99.
Akiyama, N., Shiroiwa, T., Fukuda, T., Murashima, S. & Hayashida, K. (2018). Healthcare Costs for the Elderly in Japan: Analysis of Medical Care and Long-Term Care Claim Records. PLoS ONE, 13(5), 1-15. DOI: 10.1371/journal.pone.0190392.
Ambrose, A. H. A. A., Hassan, M. A. G. & Hanafi, H. (2018). A Proposed Model for Waqf Financing Public Goods and Mixed Public Goods in Malaysia. International Journal of Islamic and Middle Eastern Finance and Management, 11(3), 395-415. DOI: 10.1108/IMEFM-01-2017-0001.
As-Sadlan, S. bin G. (1996). Ahkamul Waqfi wal Wasiyyati wal Farq Bainahuma. Riyadh: Dar Valencia Lin Nasyri wat Tawzi'.
Awang, H., Mansor, N., Peng, T. N. & Osman, N. A. N. (2018). Understanding Ageing: Fear of Chronic Diseases Later in Life. Journal of International Medical Research, 46(1), 175-184. DOI: 10.1177/0300060517710857.
Cheah, Y. K. (2018). The Utilization of Diagnostic Tests among the Elderly: Evidence from Malaysia. Socio-Economic Planning Sciences, 62, 121-128. DOI: 10.1016/j.seps.2017.10.002.
Elveren, A. Y. (2008). Social Security Reform in Turkey: A Critical Perspective. Review of Radical Political Economics, 40(2), 212-232. DOI: 10.1177/0486613407310561.
EPF. (2018a). Laporan Tahunan 2017. Employees' Provident Fund. Retrieved from https://www.kwsp.gov.my/ms/about-epf/news-highlights/publications (accessed 25 July 2018).
EPF. (2018b). Orang-orang yang Diwajibkan Mencarum. Retrieved from http://www.kwsp.gov.my/portal/ms/employers/employersresponsibility/contribution/persons-obligated-to-contribute (accessed 25 July 2018).
Folk, J. Y., Beh, L. S. & Baranovich, D. L. (2012). Financial Education: Determinant of Retirement Planning in Malaysia. Journal of Business Management and Economics, 3(2), 69-78.
Foziah, N. H. M., Ghazali, P. L., Mamat, M. & Salleh, F. (2017a). Alternative Retirement Schemes in Malaysia: Way Forward for a Sustainable and Comprehensive Coverage for all Community Level. World Applied Sciences Journal, 35(8), 1620-1625. DOI: 10.5829/idosi.wasj.2017.1620.1625.
Foziah, N. H. M., Ghazali, P. L., Mamat, M., Salleh, F. & Mohamed, S. B. (2017b). Mathematical Analysis of Retirement Income Benefit Based on Annuitization Approach. International Journal of Academic Research in Business and Social Sciences, 7(7), 1-8. DOI: 10.6007/IJARBSS/v7-i7/3160.
Frenkel, Y. (1999). Political and Social Aspects of Islamic Religious Endowments (“awqāf”): Saladin in Cairo (1169-73) and Jerusalem (1187-93). Bulletin of the School of Oriental and African Studies, University of London, 62(1), 1-20. DOI: 10.1017/S0041977X00017535.
Heryanah. (2015). Ageing Population dan Bonus Demografi Kedua di Indonesia. Populasi, 23(2), 1-16. DOI: 10.22146/jp.15692.
Holzmann, R. (2013). An Optimistic Perspective on Population Ageing and Old-Age Financial Protection. Malaysian Journal of Economic Studies, 50(2), 107-137.
Holzmann, R. (2015). Old-Age Financial Protection in Malaysia: Challenges and Options. IZA Policy Paper No.96, 1-41.
Ismail, M. A., Ab Malik, N. M. A. N. & Shafiai, M. H. M. (2015). Empowering the Peripheral Ummah through Waqf. The Journal of Muamalat and Islamic Finance Research, 12(2), 29-43.
Kahf, M. (2014). Islamic Economics: The Charitable Sector. Qatar: Ad Dawhah.
Karim, S. A. (2007). Contemporary Waqf Administration and Development in Singapore; Challenges and Prospect. Retrieved from https://uaelaws.files.wordpress.com/2012/03/contemporary-waqf-in-singapore.pdf (accessed 25 July 2018).
KWAP. (2017). Annual Report 2016. Kumpulan Wang Amanah Pencen. Retrieved from https://www.kwap.gov.my/EN/UsefulInformation/Publication/Annual%20Reports/KWAP%20Annual%20Report%202016.pdf (accessed 25 July 2018).
Lasa, Y. M., Takim, R. & Ahmad, N. (2018). Sources of Financing for Public Private Partnership Projects: Lesson Learnt from Malaysia. Indian Journal of Science and Technology, 11(20), 1-11. DOI: 10.17485/ijst/2018/v11i20/123350.
Layish, A. (2008). Waqfs of Awläd Al-Näs in Aleppo in the Late Mamlük period as Reflected in a Family Archive. Journal of the Economic and Social History of the Orient, 51(2), 287-326. DOI: 10.1163/156852008X307456.
Lutfi, M. A. & Ismail, M. A. (2016). Sadaqah-Based Crowdfunding Model for Microfinancing and Health Care. The Journal of Muamalat and Islamic Finance Research, 13(2), 31-51.
Ministry of Finance Malaysia. (2017). Laporan ekonomi 2017/2018. Putrajaya: Ministry of Finance.
Ministry of Finance Malaysia. (2018). Ucapan Bajet Tahun 2018. Retrieved from https://www.bnm.gov.my/files/2017/Ucapan_Bajet_2018.pdf (accessed 25 July 2018).
Mohsin, M. I. A. (2013). Financing Through Cash-Waqf: A Revitalization to Finance Different Needs. International Journal of Islamic and Middle Eastern Finance and Management, 6(4), 304-321. DOI: 10.1108/IMEFM-08-2013-0094.
Osman, S. (2018). Impak Insentif Ekonomi terhadap Golongan Berpendapatan Rendah Program Perumahan Rakyat, Kuala Lumpur. GEOGRAFIA Malaysian Journal of Society and Space, 14(1), 55-71. DOI: 10.17576/geo-2018-1401-05.
PERKESO. (2017). Employer & Employee Eligibility. Retrieved from https://www.perkeso.gov.my/index.php/en/social-security-protection/employer-employee-eligibility (accessed 25 July 2018).
Poh, S. K. C. (2015). A Retirement Shipwreck on the Horizon?. The 4E Journal, 15(2), 7-11.
PPA. (2018a). PRS List of Schemes & Funds Private Pension Administrator. Retrieved from https://www.ppa.my/prs-providers/list-of-scheme-funds/ (accessed 22 August 2018).
PPA. (2018b). Structure of Private Retirement Schemes (PRS) | Private Pension Administrator. Retrieved from https://www.ppa.my/prs-and-you/structure-of-prs/ (accessed 22 August 2018).
Rahman, A. A. (2009). Peranan Wakaf dalam Pembangunan Ekonomi Umat Islam dan Aplikasinya di Malaysia. Shariah Journal, 17(1), 113-152.
Securities Commission Malaysia. (2014). Private Retirement Schemes (PRS). Retrieved from https://www.sc.com.my/wpcontent/uploads/eng/html/ppa/PRS_booklet_web.pdf (accessed 25 July 2018).
Sobri, I. S. (2011). Al Waqf al Islami: Baina An-Nadzriyyati wat Tathbiqi. Jordan: Darun Nafaes.
Tsou, M. T. (2018). Healthcare Service Utilization and Associated Factors in Community-Dwelling Elderly in Northern Taiwan: One Medical Center’s Experience. International Journal of Gerontology, 12(2), 144-149. DOI: 10.1016/j.ijge.2018.02.015.
United Nations. (2015). World Population Ageing Report 2015. Department of Economic and Social Affairs, Population Division, United Nations. Retrieved from https://www.un.org/en/development/desa/population/publications/pdf/ageing/WPA2015_Report.pdf (accessed 25 July 2018).
United Nations. (2017). World Population Ageing 2017. Department of Economic and Social Affairs, Population Division, United Nations. Retrieved from https://www.un.org/en/development/desa/population/publications/pdf/ageing/WPA2015_Report.pdf (accessed 25 July 2018).
Wahab, Z. (2005). Dana Pensiun dan Jaminan Sosial Tenaga Kerja di Indonesia. Bandung: PT. Citra Aditya Bakti.
Wang, Z., Li, X., Chen, M. & Si, L. (2018). Social Health Insurance, Healthcare Utilization, and Costs in Middle-Aged and Elderly Community-Dwelling Adults in China. International Journal for Equity in Health, 17(1), 1-13. DOI: 10.1186/s12939-018-0733-0.
Yew, S. Y. & Cheong, K. C. (2013). Ageing and the Economic Welfare of Southeast Asian Nations. Malaysian Journal of Economic Studies, 50(2), 101-106.
Yusoff, N. H. B. & Aziz, R. A. (2012). Pemerkasaan Wanita Desa: Kajian ke atas Kumpulan Ekonomi Wanita (KEW), Kuala Teriang, Langkawi, Kedah. GEOGRAFIA Malaysia Journal of Society and Space, 8(6), 15-23.
How to Cite
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
Copyright of the accepted articles will not remain with author(s). Prior to publication of accepted article, author(s) will be asked to assign copyright to the JMIFR. All published articles in the journal are copyrighted to the JMIFR.