Compensition & Benefits
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Account 1 (for retirement and be withdrawn only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educate, health needs and can be withdrawn at age
• 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
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• The age for fully withdrawn is 50.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
• Employees Social Security Act of 1969 is based on
social insurance principles.
• It operates the Employment Injury Insurance
• 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.
• 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.