Compensition & Benefits Management

Pension System in Malaysia

Employment Provident Fund (EPF)

• Private sectors workers.• It’s defined contribution, mandatory plan for

employees and employer based on a prescribed rate of contribution accumulated as saving in a personal account (13% + 11% -effective on september 2013).

• Gross contributions are channeled into two account. Account 1 (for retirement and be withdrawn only when reaches 55 years). Account 2 ( housing, tertiary educate, health needs and can be withdrawn at age 50).

• Benefit pension scheme financed fully from the government budget without any contributions from beneficiaries.

• Minimum retirement age is 60 years.• Minimum 10 years of service is required to be

eligible for a pension.• Provisions for those who are injured or die

during service.

Civil Service Pension Scheme

The Armed Forces Fund (LTAT)

• It’s mandatory for all military personnel who are not commisioned officers.

• It’s a defined- contribution scheme at a rate of 10 % of monthly salary employees and 15% from the government as employer.

• The age for fully withdrawn is 50.

Social Security Organization (SOCSO)

• Employees Social Security Act of 1969 is based on social insurance principles.

• It operates the Employment Injury Insurance Scheme.

• The former provides medical, disability, death and rehabilitation benefits for workers injured on the job.

• The rate of contribution for the injury scheme is 1% (employer) 0.5% (employee).

• SOCSO provides pension for spouse on the death of actively employed beneficiaries younger than 55.

Social Pensions

• Malaysia’s Department of Social welfare provides a monthly pension of RM300 the people older than 60 who are destitute, infirm, and have no next of skin.

The End………