MALAYSIA:::Who can contribute to EPF

Among those who can contribute are part time workers and foreigners working in Malaysia.

PETALING JAYA: If you are an employee in the private sector, you are mandated to contribute to the EPF for your retirement, but do you even know what it is? SaveMoney.my’s guide explains everything to know about the EPF and what you can hope to expect upon retirement.

What is the Employees Provident Fund (EPF) (aka Kumpulan Wang Simpanan Pekerja (KWSP))?

The Employees Provident Fund Act 1991 (Act 452) provides retirement benefits for members of the EPF by managing their savings contributions.

The EPF is a social security institution which administers their members retirement fund using a defined contribution plan. This is different from a government pension which is a defined benefit retirement plan.

The main difference is that with the EPF, your final payout is determined by the contributions (from both you and your employer) and its investment returns, while a public pension’s final payout is fixed and becomes a liability to the Public Services Department.

Employee and Employer Responsibilities

What are Employees’/Employers’ Responsibilities? When you work for the first time, it is your employer’s responsibility to register you with the EPF. They will be required to complete Form KWSP 3 with your personal details and signature as stated in your national identity card, with your assistance.

Your employer should register you as an EPF member as soon as you are first employed to ensure that your EPF contributions can be paid within the stipulated period. For example, if you are employed on Jan 1, you should be registered at the beginning of that month, so that your January salary can be deducted and paid to the EPF as the first contribution not later than Feb 15th.

You only need to be registered as an EPF member once; when you change jobs you should inform your new employer of your existing EPF number.

Contributions

Who is mandated to contribute to the EPF? Can I contribute voluntarily? With few exceptions, all individuals who work for a wage in the private sector (or in a non-pensionable role in the public sector) are required to make EPF contributions, including:

• directors who receive wages;

• part-time, temporary, and probationary employees;

• employees are to contribute until the age of 75 years if they are still working regardless whether or not they have made a

full/partial withdrawal after attaining 55 years of age;

• employees who have withdrawn their savings under the Pensionable Employees and Optional Retirement Withdrawal, and work withemployers other than the federal or state governments, or any statutory bodies or local authorities; and

• employees who have previously made full withdrawal under the Incapacitation Withdrawal and have since recovered and are re-employed in any service.

There are two categories of individuals who are not required to contribute but may opt to do so:

Malaysian citizens

• A domestic servant employed in a residential home, whose wages are paid by an individual (the house owner), may opt to contribute by submitting a notice of election to contribute using Form KWSP 1 (MAJ). A copy of the form must be submitted to the EPF and another to the employer.

• If you are self-employed opting to contribute voluntarily, you must first register as an EPF member by completing Form KWSP 3.

Contributions can be made using Form KWSP 6A(1). The minimum contribution amount is RM50; there is no maximum rate.

Non-Malaysian citizens
• Foreign workers employed and staying in Malaysia legally may submit a notice of election to contribute using Form KWSP 16B and register as an EPF member using Form KWSP 3. A copy of the Form KWSP 16B must be submitted to the EPF and to the employer.

source:::http://www.freemalaysiatoday.com