EPF or Employees Provident Fund (also known as the KWSP) is the Malaysian government agency that is tasked to manage the compulsory saving and retirement plan for Malaysian workers who are not entitled for pension scheme. More than 10 million Malaysians are now registered members of the EPF, with the EPF savings now stand at a massive RM407 billion.
The money in the EPF account is contributed by both the employee (taken from the monthly salary’s cut) and employer. The current contribution rate is 11% from employee and 12% from employer. For example, if a finance officer is paid RM2,000 monthly salary, his total monthly EPF contribution will be 11%xRM2k + 12%xRM2k = RM460. As the salary increases, so will the amount in your EPF account statement.
The idea behind the EPF contribution is that, when we stop working at our retirement age, the money that we (and the employer) have been contributing every month will be made available for our retirement use. In addition to that, other benefits include some financial assistance when a worker is buying his/her first house, a computer or other assets which have been incorporated into a certain EPF scheme.
EPF beneficiaries are the nominated persons assigned in your EPF account. As the name stands, they are the beneficiaries or recipient s of the scheme in case of death of the contributing EPF member. Without these beneficiaries, the next-of-kin will have to face a tedious, lengthy and time-consuming process to make a legitimate claim of the saving. The end result could be frustration and anger.
Also, beneficiary nomination will supersede a written will. For Muslims, the nominees will act as an administrator (wasi) and is responsible to coordinate distribution of the saving according to the Faraid method in Islam.
EPF is now on an aggressive drive to get the EPF members to nominate their account beneficiaries. If you are one of the contributing EPF members and yet to name your beneficiaries, you can do so by visiting the nearest EPF branch or fill up the online beneficiary nomination form available at EPF official website.