FOR ATTENTION OF ALL MALAYSIAN EPF MEMBERS

S0ME “UNFAMILIAR” FEATURES OF THE EMPLOYEES PROVIDENT FUND (MALAYSIA) THAT MEMBERS/CONTRIBUTORS OUGHT TO KNOW……………………………

(Foreword: What I am sharing now is for the benefit of Employees Provident Fund (EPF) members in the two categories – (1) Those who are still contributing regularly to their respective account in the fund; (2) Retirees who have ceased contributing but still maintain some balance amount in the fund. To my many friends who are already above 55 years old (some already retired, some still working) and still EPF members, I hope this article would enlighten them if at all relevant for their attention.

NOMINATION

Sometime ago, there was an e-mail circulating regarding the plight of a widow who could not immediately claim from her deceased husband’s  EPF balance of RM30,000. She said she was the sole nominee named by her husband. In the end, she had to seek the assistance of Amanah Raya (public trustee) to legally claim the money.

Was this allegation true? Perhaps so, but I believe certain facts relating to the issue were not mentioned. As the balance amount was only RM30,000, I believe the deceased had made partial withdrawals before his demise. Perhaps, that was the crux of the issue. A couple of questions are most relevant to the so-called plight of this widow. Question 1:  Did the deceased EPF member  apply for any Age 55 withdrawal? Question 2: Which year did he apply for the withdrawal? – was it before Feb. 1 2008?

Now, allow me to share with you some excerpts extracted from the Members’ Guide (below).

Quote:

“There will be changes to the nomination status when you make the Age 55 Years Withdrawal during the following periods:

·         Before 1 November 2007

If you make the Age 55 Years Withdrawal, then the nomination made prior to this will be revoked.

·         Transition Period (1 November 2007 – 31 January 2008)

If you make the Age 55 Years Withdrawal and opt for a lump sum payment of savings, the nomination prior to this will be revoked. If you are still employed and opt to re-contribute, you will be required to make a new nomination.

If you make the Age 55 Years Withdrawal and opt for partial savings withdrawal, then the nomination made before this will remain in effect.

·         Starting 1 February 2008

If you make the Age 55 Years Withdrawal and opt for whichever method of payment, the nomination made before this will remain in effect.”

DIVIDENDS

Quote:

“All EPF contributions will be paid dividends until the member attains the age of 75 years. A minimum dividend of 2.5% is assured by the government. The dividend given to you is based on monthly and yearly balances.

The dividend for every member’s account is calculated based on aggregate daily balance.”

INCAPACITATION AND DEATH BENEFITS

Quote:

“The Incapacitation and Death Benefits are a good gesture by the EPF, payable to the member/guardian or beneficiary to help lessen the financial burden when the member suffers from incapacitation or in the event of death. The money comes from EPF investment earnings and not from the member’s savings.”

INCAPACITATION BENEFIT (INCAPACITATION WITHDRAWAL

Quote:

“The Incapacitation Benefit is paid to the member who has lost his job owing to incapacitation and has made an Incapacitation Withdrawal. The amount for Incapacitation Benefit is RM5,000.00. This benefit will be given once only, subject to the following conditions:

·         *Malaysian citizen;

·         *Member has not attained the age of 55;

·        * Applied for Incapacitation Withdrawal within 12 months of the date of termination of service;

·         *Last period of service must be at least 6 continuous months;

·         *Reason for termination of service must be incapability to work and not disciplinary action or voluntary resignation.”

DEATH BENEFIT (DEATH WITHDRAWAL)

Quote:

“The Death Benefit is paid to the member’s dependant or next-of-kin, subject to consideration by the EPF, when the application for Death Withdrawal is made. The amount for Death Benefit is RM2,500.00 This benefit will be given once only, subject to the following conditions:

·         *Malaysian citizen;

·         *Member has not attained the age of 55 years at the time of death;

·        * Application for Death Withdrawal is made within 6 months of the date of demise of the member.”

MATRIMONAIL ASSET CLAIM

Quote:

“Can you claim a portion of your spouse’s EPF savings in the event of a divorce?

Yes, in the event of a divorce of non-Muslim members. The ex-wife or the ex-husand can make a claim on the EPF savings of the former spouse as a joint matrimonial asset upon obtaining a court order.

This application can be made within 6 years of the date of enforcement of the court order. If all of the savings in the EPF account are covered under the matrimonial asset claim, then the claimant or claimant’s beneficiary will not be entitled for Incapacitation Benefit or Death Benefit.

The claimant may also nominate a beneficiary for the matrimonial asset.”

(Note to EPF members: For full understanding of the features and benefits, get hold of the Guide.)