The effect of tax incentives, matching contributions, and perceived government policy on retirement savings behaviour

Malaysian civil servants generally have low retirement savings, which compromises their financial stability after retirement. As the population ages, living costs rise, and reliance on pensions remains substantial, improving retirement savings has become increasingly critical. However, there is limited evidence regarding the factors that affect this behaviour. This study investigates whether tax incentives, matching contributions, and perceptions of government policy predict retirement saving behaviour among Malaysian civil servants. It draws on the behavioural economic model and rational choice theory. Using a cross- sectional quantitative design, the study surveyed 285 permanent civil servants (Grades 9–15) with income tax records, selected through purposive sampling. Data were analysed using SPSS 29 and SmartPLS 4.0. The results showed that tax incentives and perceived government policy had a positive effect on retirement saving behaviour, whereas matching contributions did not. These findings highlight the role of incentives and policy perceptions, indicating that interventions such as tax incentives and automatic enrolment could improve participation in retirement savings schemes.