Pension
All employers are required to register with the Employees Provident Fund’s Board. Contributions are made by both employers and employees at rates tied directly to the wages paid per month for any amount over MYR 10 (Malaysian ringgits). The minimum age to retire is 60.
All employees, including those hired on a contractual basis, are eligible for EPF. The government has also increased the scope of the Self-Employment Social Security Scheme. Additionally, persons in the fishing and farming industries are eligible for social security compensation.
Members can withdraw from their pension funds at age 55 as a lump sum or annuity. Employees younger than 55 can apply to make withdrawals for specific purposes, such as higher education for the employee or their child, construction or purchase of a house for personal use, or permanent emigration from Malaysia. Employees who continue to contribute after 55 years can withdraw funds they contributed after 55 years only when they attain the age of 60 years.
Dependents/Survivors Benefits
In Malaysia, a member of the Employees Provident Fund may nominate another person to be the recipient of any outstanding credit in the event of the employee’s death or incapacitation.
Social Security Fund pays survivors pension if the deceased was under 60 years of age and had made monthly insurance contributions for at least 24 out of the 40 months preceding their death or was in receipt of an invalidity pension. Payments are made to the widow or widower for life, and each child until the child either marries or turns 21, whichever occurs earlier. The dependents are entitled to receive a pension at the rate of 50% of their average assumed monthly wage, increased by 1% for every 12 months’ contributions that are paid in excess of the first 24 months, limited to a maximum of 65%.
Contributions to the scheme are paid by both employees and employers.
Invalidity Benefits
Employees under 60 years old who are incapable of engaging in any substantially gainful activity due to a morbid condition of permanent nature are eligible for pension if they have paid at least 24 monthly contributions during the 40 months prior to the onset of disability. The pension is paid as 50% of the average monthly wage of the employee in the last 24 months, increased by 1% for every year of contributions after the first 24 months, limited to a maximum of 65%.
For temporary disability due to work accidents or diseases, benefits are paid after four days as an amount equivalent to 80% of the average daily wage. For permanent disability, 90% of the average salary is paid as a pension.
Contributions to the scheme are paid by both employees and employers.