- ensuring retirement benefits for its members

epf logo

The Employee Provident Fund or commonly known by is acronym EPF is a national security organisation operating through a provident fund scheme in Malaysia. Formed 50 years ago, the EPF is among the earliest federal government agencies established after it achieved its independence on August 31, 1957.

It is also one of the oldest established provident funds in the world

The idea to form a collective fund that can be withdrawn upon retirement or when a person get laid off from work came about during the pre-colonial days when many multinational companies formed their own provident funds for their employees. At this time, the government realised that there was a need to form a common national provident fund that double up as “forced” savings and a social assurance of income after retirement or when an employee is forced out of work.

Sarawak Branch

Senior Manager for EPF Kuching Office, En. Mohd. Zulkifly bin Zainal Abidin

The Sarawak branch was set up seven years later in March 1968 but began operation in December 1969. The EPF draws its members from the private and non-pensionable public sector employees. There are 012002ly 700,000 contributors registered with the EPF. Out of this, only 400,000 are active members employed by 24,000 active registered employers.

There are four branches in the whole of Sarawak employing 217 people. Besides Kuching, there are three other branches located in Bintulu, Sibu and Miri. Plans to expand the service to other districts are in the pipeline.

For Sarawak, the number of companies that do not register with the EPF is minimal at 1.8%.

Four-pronged mission

EPF has a four-pronged mission which covers its Members, Employers, the Nation and the Employees.

The primary mission of the provident fund is to provide retirement benefits to its members through the management of their savings in an efficient and reliable manner. For the employers, it provide an efficient and convenient system to ensure that they meet their statutory and moral obligation of contributing to EPF for their employees.

The existence of the EPF will also benefit the nation’s socio-economic development through their prudent investments. And as for the employees, the organisation hopes to provide a motivating, participating and challenging working environment which can propel them to peak performance.

A quick update in EPF displayed at their office in Kuching

Among the corporate objectives of EPF are:

• To increase quality of service by putting emphasis on reliability and efficiency to exceed customers’ expectation

• To improve the organisation’s image by placing emphasis on the retirement benefits for its members

• To attract, motivate, develop and maintain members necessary for the organisation to achieve its objectives

• To adopt an efficient and prudent financial management for the organisation

• To improve the retirement benefits in line with the social security principles

• To ensure that employers carry out their responsibilities in accordance with the EPF Act

Among its primary functions are:

• To receives and collect EPF contributions

• To invest funds collected from contributors

• To return contributors’ savings to members or beneficiaries via the savings withdrawal process.

Withdrawal schemes

One of the main objectives of the Employees Provident Fund is to provide for the needs of members in time of need by returning a portion of their savings through its various withdrawal schemes. There are 012002ly 17 withdrawal schemes.

Each member’s account is divided into three parts. Account 1 makes up 60% of total savings, Account 2 is 30% while Account 3 takes the remaining 10%. No withdrawal is allowed from Account 1 except after retirement. Withdrawals can only be made from Account 2 and 3 as provided for by the 17 schemes.

Among the more popular schemes is the Home loan scheme whereby members can withdraw all their balance in Account 2 for the purchase of first homes.. Introduced in 1982, this scheme was recently amended to allow a second withdrawal for the purchase of second homes or for reducing the existing home loans.

Other popular schemes include the Computer scheme and the Education scheme which were both introduced last year. In July 2001, the Education scheme was extended to members who wish to further their studies at diploma level or above.

To date (October, 2001), 1,084 applications for education were approved with withdrawal worth about RM7 million.

As for the housing loan scheme, 13, 196 cases worth RM1 billion have been approved as of August 2001.

Most approved withdrawals were processed within 10 working days - a commitment stated in its client’s charter to process approved withdrawal payment within 14 working days.