Financial literacy and behavioural disposition in retirement saving – A study on employee’s preparedness for a fully defined contributionpension scheme in Malaysia

Authors

  • Mat Salleh @ Salleh Wahab Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, Kota Kinabalu, Sabah 88400, Malaysia
  • Mohd. Rahimie Abd. Karim Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, Kota Kinabalu, Sabah 88400, Malaysia
  • Thien Sang Lim Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Jalan UMS, Kota Kinabalu, Sabah 88400, Malaysia

Keywords:

attitude towards behaviour, behavioural disposition, financial literacy, perceived behavioural control, subjective norms

Abstract

MalaysiaAbstractThis paper provides vital results on employee’s preparedness towards government proposal in substituting the traditional pension system for a fully Defined Contribution Retirement scheme. By offering a distinct financial literacy measurement index and extending the Theory of Planned Behaviour analysis, this study found that individuals with higher financial literacy, alongside positive behavioural, normative, and controlled beliefs are more likely to have informed financial decision particularly in retirement savings. Thus, the government and various stakeholders should intensify an advanced financial educational programme, as well as establish more appropriate retirement schemes to increase employee’s financial adequacy and pension benefits.

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Published

2022-07-27

Issue

Section

Research articles