The Retirement Time Bomb: What Brunei Risks If It Ignores the Informal Sector

He’s been selling vegetables for over 30 years. No pension. No savings. No plan for what comes next.

“Apa kan jadi bila ku inda dapat kerja lagi?”

That haunting question isn’t just his — it belongs to over 82,000 Bruneians working in the informal sector.

As Brunei’s gig economy expands, so does the risk of mass poverty in old age. The solution exists. But barely anyone knows about it.

🔍 This isn’t just about economics — it’s about justice, dignity, and the future of our society.

 

By Malai Hassan Othman

 

BANDAR SERI BEGAWAN, MARCH 2025: At 4:30 a.m., while most of Brunei is still asleep, Haji Mohamad quietly pushes his cart to Tamu Kianggeh. The 58-year-old has spent over three decades selling vegetables, surviving on meagre earnings to raise five children. 

 

Lately, his hands have shaken more than they used to, and his knees have complained with every step. He has no pension. No savings. No medical insurance. "Apa kan jadi bila ku inda dapat kerja lagi?" he asks softly. What will happen to me when I can no longer work?

 

His story is not unique. It is the story of thousands in Brunei’s gig and informal economy -  those who cook and deliver food, sell kuih online, drive for ride-hailing apps, or repair gadgets from makeshift stalls. 

According to official estimates, over 82,000 people work in the informal sector, with 15,000 to 25,000 engaged in gig-based roles. Yet, shockingly, only about 300 have enrolled in the country’s retirement protection scheme for self-employed individuals.

 

The Skim Persaraan Kebangsaan (SPK) - was designed for them. Introduced on 15 July 2023, it targets Bruneians in the informal and gig economy. But most don’t even know it exists.

 

 

 Forgotten by the System

Gig workers operate in a grey zone. They are neither formally employed nor protected by the benefits that come with official employment - TAP, SCP, insurance, maternity leave, or a clear path to retirement. 

Many survive month-to-month on income ranging from BND 800 to BND 1,200, or even lower depending on the business they are engaged in, and they are often excluded from accessing even basic credit or loans.

A senior official familiar with the scheme, speaking anonymously, admitted: "Our biggest challenge is awareness. Many of these workers do not think about retirement, or they think it doesn’t apply to them."

The SPK, administered by Tabung Amanah Pekerja (TAP), offers a basic social safety net. It includes monthly retirement contributions, death and survivor benefits, and access to savings at the end of one's working life. 

Contributions start as low as BND 17.50 per month. Yet, the uptake remains dismal.

Why Aren’t They Enrolling?

Fear. Mistrust. Financial illiteracy. Digital divide.

These are the barriers that keep thousands out of the system designed to protect them. 

In a small survey conducted by this writer, several home-based business owners said they had never heard of SPK. 

Others admitted they were afraid to register. "Takut ku eh, inda pasti," said one. "Inda ku pandai macam mana caranya, isi borang inda ku pandai, online atu pun inda ku tahu."

Some think SPK is only for those with permanent jobs. Others simply cannot afford to set aside any money from their already limited income.

Yet, without protection, they are left vulnerable.

A wedding photographer shared how COVID-19 wiped out all his bookings. "I lived off my savings and borrowed from friends. No one came to help. That’s when I realised I had nothing backing me up."

TAP's website offers detailed instructions and allows for walk-in registration. But for many, this isn’t enough. "We need to go to them," said another official. "Not wait for them to come to us."

Not Just a Policy, but a Lifeline

Self-employed individuals who register with SPK, complete the verification process and contribute a minimum of BND 17.50 per month to their retirement account are eligible for a Government Match-Up of an additional BND 17.50.

Upon reaching the retirement age of 60, the total accumulated contributions - including the government’s top-up - support their monthly income through the SPK Annuity Payout. 

This annuity provides a minimum monthly payout of BND 250, ensuring financial stability in later years.

As Brunei citizens or stateless permanent residents, they also qualify for the Old Age Pension of BND 250, bringing their total monthly retirement income to BND 500.

Contributors can choose to pay between BND 17.50 and BND 40.00 per month. While BND 250 remains the minimum monthly payout under SPK, contributing more increases the potential payout and can extend the duration over which the annuity is received.

Let’s explore three real-world scenarios that show how starting age and contribution level affect retirement outcomes:

 ✅ Scenario 1: Early and Consistent Saver

A 25-year-old verified self-employed individual contributes BND 17.50 monthly until retirement at 60. 

With 35 years of continuous contributions, they qualify for the minimum SPK annuity payout of BND 250, payable for up to a lifetime. 

Combined with the Old Age Pension, their retirement income reaches BND 500 monthly. Their TAP account may also hold substantial savings for lump-sum withdrawal.

 

✅ Scenario 2: Higher Tier Saver

 A self-employed individual contributes BND 40.00 monthly from age 25 until 60. 

At retirement, they are entitled to a lifetime SPK annuity payout of BND 350, in addition to the Old Age Pension - totalling BND 600 monthly. This offers stronger financial security in later life.

 

🔴 Scenario 3: Late Starter

A verified self-employed person joins SPK at age 50 and contributes BND 40.00 monthly for 10 years. They still qualify for the minimum SPK annuity payout of BND 250. 

However, the shorter contribution window means the annuity may only last for a limited time unless the monthly payout is reduced to extend its duration.

The payout amount and annuity duration depend on two key factors: how much you contribute and how long you contribute. Higher monthly payments result in greater retirement income, and starting earlier helps ensure the annuity lasts longer.

Contributions exceeding BND 40.00 per month or less than BND 17.50 go into the individual's SPK Member Account. This account gives added flexibility, allowing members to access funds before retirement or withdraw them as a lump sum at age 60.

This structure empowers Brunei’s self-employed to build a stable and secure retirement, even if they begin late. The system’s flexibility allows individuals to supplement their income and improve their long-term financial outlook.

Time to Act

Institutionalising the informal sector and gig economy is not just an economic necessity - it is also a spiritual, social, and national obligation. 

 In the context of Brunei’s identity as a Negara Zikir, a nation rooted in Melayu Islam Beraja (MIB) and guided by the vision of becoming a Baldatun Ṭayyibatun wa Rabbun Ghafūr, caring for all members of society is a reflection of Maqasid Syariah - particularly the protection of life, wealth, intellect, and lineage.

By formally including informal and gig workers in national systems like SPK, the country fulfils the Islamic ethical imperative of protecting the dignity and well-being of every citizen. 

This aligns with the broader goals of a compassionate, just, and spiritually conscious governance model. It is not just good policy - it is good faith.

Addressing this issue requires more than isolated efforts. It demands a Whole Of Nation Approach (WONA) - bringing together government agencies, financial institutions, civil society, community leaders, and the media to build a safety net that no Bruneian falls through.

If we fail to act now, the nation may face a future where tens of thousands of ageing informal workers fall into poverty. 

Many will become fully dependent on the Sistem Kebajikan Negara and Baitul Mal, putting immense pressure on welfare institutions and charitable resources meant for the most vulnerable. 

Without sustainable planning, today’s inaction could translate into tomorrow’s national crisis.

It’s not too late. The SPK has the right ingredients. But it needs amplification. 

Civil society, media, youth groups, and local councils must play a role. 

Mobile TAP booths in night markets. Digital literacy workshops for online sellers. Collaboration with gig platforms to automatically enrol users.

Because the question is not whether the gig economy is growing. It already has.

The question is: Are we doing enough to protect those who are building our economy from the ground up?

Back at Tamu Kianggeh, Haji Mohamad begins packing up. He smiles when asked if he’s ever thought of retirement. "Of course," he says. "But who will take care of me?" (MHO/03/2025)
 

What do you think needs to be done?

Are we doing enough to protect those who power our informal and gig economy?

🗣️ Join the conversation. Tag a self-employed friend running a home-based business or freelancing online.

Because safeguarding their future is not just a policy issue — it’s a moral obligation we all share.

💬 Share your thoughts below or inbox me if you want to learn more.