How Inflation and the Exchange Rate Affect the Real Value of Pension Plan Systems: The Case of Malaysia

SSRC Working Paper Series No. 2017-2

27 Pages Posted: 10 May 2017

See all articles by Mario Arturo Ruiz Estrada

Mario Arturo Ruiz Estrada

Universidad de San Carlos de Guatemala; Center of Latin American Studies (CLAS) - University of Malaya; University of Malaya (UM) - Social Security Research Centre (SSRC)

Alam Khan

KUST

Marcin Staniewski

University of Economics and Human Sciences in Warsaw

Norma Mansor

University of Malaya

Date Written: May 8, 2017

Abstract

This article explores how inflation and the exchange rate can affect the real value of any pension plan system in the long run. In our case, we focus on the specific pension plan system of the Employees Provident Fund (EPF). Nonetheless, we use a new model that is entitled “The EPF Real Value Box – EPFRV Box”. The EPFRV Box facilitates the graphical visualization of the inflation/exchange rate impact on the Employees Provident Fund (EPF). In essence, the EPFRV Box is applied to the Employees Provident Fund (EPF) of Malaysia to evaluate the impact of inflation and exchange rates on the Malaysian EPF real value from 1980 to 2030. Finally, the main objective is to apply the EPFRV Box to extend the significance of the impact of inflation and the exchange rate on any pension plan system (in this case EPF) beyond mere theory, using them as practical instruments to solve retirement and pensioner problems.

Keywords: Inflation, Pension Plan System, Malaysia, EPF, Econographicology

JEL Classification: Y20

Suggested Citation

Ruiz Estrada, Mario Arturo and Khan, Alam and Staniewski, Marcin and Mansor, Norma, How Inflation and the Exchange Rate Affect the Real Value of Pension Plan Systems: The Case of Malaysia (May 8, 2017). SSRC Working Paper Series No. 2017-2, Available at SSRN: https://ssrn.com/abstract=2965249

Mario Arturo Ruiz Estrada (Contact Author)

Universidad de San Carlos de Guatemala ( email )

Ciudad Universitaria Zona 12
Guatemala, Guatemala city
Guatemala
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HOME PAGE: http://www.usac.edu.gt

Center of Latin American Studies (CLAS) - University of Malaya ( email )

R&D Wisma
Kuala Lumpur, 50603
Malaysia
+60126850293 (Phone)

HOME PAGE: http://ssrc.um.edu.my/

University of Malaya (UM) - Social Security Research Centre (SSRC) ( email )

Malaysia

Alam Khan

KUST ( email )

Department of Economics Kohat University of Scienc
Kohat, Khyber Pakhtunkhwa 26000
Pakistan

Marcin Staniewski

University of Economics and Human Sciences in Warsaw ( email )

Okopowa 59
Warsaw, 01-030
Poland
+48225365473 (Phone)

Norma Mansor

University of Malaya ( email )

Faculty of Economics and Administration Building
Kuala Lumpur, 50603
Malaysia

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