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CHAPTER 7 SOCIAL SECURITY LEGISLATION (EMPLOYEES PROVIDENT FUND)…
CHAPTER 7
SOCIAL SECURITY LEGISLATION
(EMPLOYEES PROVIDENT FUND)
A term to describe programmes to provide workers and their dependents with some income when their normal income shrinks or stop together.
Employee Provident Fund Act 1991 (Act 452) which provides retirement benefits for members through management of their savings is an efficient and reliable manner.
Duty of Employers To Register With The Board
Under Section 41.
(1) Every employee shall, unless he is already registered with the Board, before the end of the first week in the first month in which he is paying wages in respect of which he is required to pay contributions under this Act, register with the Board in the manner as may be prescribed by the Board.
(2) Any employer who contravenes the provisions of subsection (1) shall be guilty of an offence and shall on conviction, be liable to imprisonment for term no exceeding 3 years or to afine no exceeding RM10000 or to both
(3) Where any person ceases to be an employer, within the meaning of Act, he shall within the period as prescribed by the Board, notify the Board of the same in the manner as may be prescribed by the Board.
(4) Any person who contravenes the provisions of (2) shall be guilty of an offence
Membership
All employees are required to become members
As long as worker is employed under contract of service he is required to become a member
Part-time or temporary workers must contribute.
Exemption to domestic servant and foreign workers
Contributions to the fund based on employee monthly wages
Contributions
Minimum contributions rate for employers and employees have changed depending on the government 's economic policy at the time
Rate Contributions Section 43 (1)
Constitutes the amount of money credited to members individuals account in the EPF.
Current contributions rate is accordance with wage received. Employees who received RM500 and below the portion of employees contribution is 11% of their monthly salary while employer contributes 13%
Employees who received wages exceeding RM5000 the employees contributions of 11% remains, while the employer contributions is 12%
Section 43 (2)
Any person being an employer who fails within such period as may be prescribed by the Minister, to pay to the Fund any contributions which he is liable under this Act to pay in respect of or on behalf of any employee in respect any month shall be guilty of an offence and shall on conviction,be liable to imprisonment for a term no exceeding 3 years or to fine no exceeding RM 10 000 or to both.
Withdrawal of Contributions
Section 54:
The Board may authorize the withdrawal of all amount upon any terms and conditions as may be prescribed by the Board if the Board is satisfied that:
The member of the Fund has died
Physically or mentally incapacitated from engaging employment
Member is about to leave Malaysia and has no intention of returning Malaysia
Member has attained the age of 55 years.
No withdrawals are permitted from the first and biggest account until the employee reaches age of 55
Second account, into which 30% of the monthly contributions are put, is available withdrawals for purposed such as housing and education
When member reaches 55 of age, he can withdrawn all the remaining money in his account, which consists of the accumulated contributions paid by his employer and himself, plus the annual dividend which has been declared by the EPF Board.