Malaysia's Pension System

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Malaysia's Pension System

  1. 1. Compensition & Benefits Management Pension System in Malaysia
  2. 2. 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 Account 1 (for retirement and be withdrawn only when reaches 55 years). Account 2 ( housing, tertiary educate, health needs and can be withdrawn at age 50).
  3. 3. • 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
  4. 4. 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 • The age for fully withdrawn is 50.
  5. 5. 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.
  6. 6. 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.
  7. 7. The End………

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