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256 5.4 Employee Provident Fund (EPF)

Objectives

By the end of this sub unit, you should be able to:

1. Explain the establishment of EPF Board.

2. Describe the offences and penalties in relation to the Act and Regulations of EPF.

3. Explain the obligations of an employer under EPF Act 1991.

4. Explain how EPF contributions are utilised.

5. Describe how I-Akaun helps its members.

 

Introduction

Every nation has to have a saving scheme. A state, in its responsibility to allocate resources from taxes collected, also has the duty and responsibility to safeguard its citizens’ assets for their future retirement and also for their future generation.

Malaysia’s national savings scheme for workers was first mooted in 1949 by the then Labour Department, i.e., the Joint Wages Council. The council formed the Employees Provident Fund (EPF) and the EPF was legitimased formally by the enactment of the Employees Provident Fund Ordinance passed by the Federal Legislative Council of Malaya on 1 October 1951. In line with all legislation pre Independence of Malaysia, this Ordinance was subsequently substituted with an enabling statute called Employee Provident Fund Act 1991 for the creation of a body to manage the savings i.e., Employee Provident Fund Board, an agency under the Ministry of Finance . The Board is responsible to the Ministry of Finance.

In 1952, before independence of Malaysia, EPF has only 500,000 members and a fund size of RM2.6 million. To date, as at September 2011, EPF has a total of 13 million members. The total number of active and contributing members is 6.16 million, whilst the total number of active employers is 485,056, source: http://www.kwsp.gov.my 

Membership of the EPF is mandatory for working Malaysian citizens, or non- Malaysian citizens who are either permanent residents or have been EPF members before 1 August 1998.

License

5.4 Employee Provident Fund (EPF) Copyright © 2011 by Wawasan Open University. All Rights Reserved.

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