Are There Adequate Benefits and Contributions for SOCSO’s Invalidity Pension Scheme (IPS)?

Abstract

Social security is a protection that a country legally gives to its citizens against interruption, death and loss of income. There are two kinds of protection schemes SOCSO in Malaysia, namely the Employment Injury Scheme (EIS) and the Invalidity Pension Scheme (IPS). This article aims to determine the benefits and contributions of IPS using Actuarial Cost method. In addition, this result will be used to compare with the adequacy of SOCSO contribution rate. Data of number of active populations in year 2014 for Invalidity Pension and Survivors’ Benefit are obtained from Social Security Organisation (SOCSO). The findings concluded that the claim made on benefits is higher than the contribution. This can lead to inadequate for benefits as compared to contributions.