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Posts tagged ‘EPF’

Job insurance scheme for private sector workers in the pipeline

Datuk Seri Dr S. Subramaniam
Datuk Seri Dr S. Subramaniam

SEGAMAT: A compulsory unemployment insurance scheme for workers in the private sector is in the pipeline, says Human Resources Minister Datuk Seri Dr S. Subramaniam.

He said a commission had been studying the matter since last year and had submitted its initial report recently on possible models to be adopted.

Dr Subramaniam said the scheme would cover Malaysians working in all sectors, regardless of pay scale.

“We want to protect people who don’t have jobs or are in between jobs.

“We have looked into the backgrounds of young and old workers and how we can provide them with better security, including after they retire,” he said after launching the Segamat-level Labour Day celebrations at the Batu Anam municipal council field yesterday.

He said that although many developed countries had unemployment insurance schemes, they had drawbacks and Malaysia needed to be careful before implementing it.

At present, the savings of workers in the Employees Provident Fund (EPF), especially for those earning low wages, were not enough to sustain them during retirement, as most of them would exhaust the money within three years.

On another matter, Dr Subramaniam said street protests and demonstrations during Labour Day were not part of Malaysian culture.

He said the occasion in the past had always been a celebration of Malaysian workers’ contributions but some quarters were subverting it for their own selfish needs.

“There are certain parties which want to solve issues through blackmail. We cannot allow this culture to thrive,” he said in condemning the planned protest by the National Union of Bank Employees (NUBE) against him.

He said it was not fair of the NUBE to be upset with him after about 3,000 of its members decided to set up their own union.

“It has become a legal case and we should leave it to the court to decide,” said Dr Subramaniam.

The Star – http://thestar.com.my/news/story.asp?file=/2013/5/2/nation/13055467&sec=nation

Bosses who default on EPF contributions to pay dearly

PETALING JAYA: The recovery of unpaid Employees Provident Fund (EPF) contributions by errant employers is no longer limited to six years.

This follows a landmark decision by the Federal Court of Malaysia on Jan 16, affirming an earlier decision by the Court of Appeal which had refused to grant further appeal to an errant employer over the issue of limitation.

EPF general manager for public relations Nik Affendi Jaafar said with that decision, employers could not evade paying their EPF contribution based on the six-year limitation.

“With this landmark decision, any appeal by errant employers on time-limit grounds merits no further argument in any court as the Federal Court has considered the issue as settled law.

“Employers are therefore advised to take proactive steps to ensure the timely submission of their employees’ contribution payments,” he said in a statement yesterday.

Nik Affendi said that the rate of defaulting employers for the fourth quarter of last year had reduced to 1.2% from 1.48% in the previous period following enforcement initiatives taken by EPF.

“A total of 139 employers were fined a total of RM177,180 for the offence under the EPF Act during the period.

“We also filed 244 civil suits against company directors and 748 criminal cases against employers who defaulted on their employees’ contribution.

“During the same period, the names of 436 company directors were submitted to the Immigration Department to prevent them from leaving the country without first settling their EPF arrears,” he added.

Under the EPF Act, employers are obliged to submit their monthly statutory contributions before or on the 15th day of each month.

Members are urged to check their EPF accounts on a regular basis to ensure that their contributions are in order and to immediately report any discrepancy in their account.

The Star

More opting for EPF flexible withdrawals

IGNIFICANT GROWTH: Members are managing their retirement savings better, says CEO

EPF 

KUALA LUMPUR: MORE Employees Provident Fund (EPF) contributors are opting for flexible withdrawals upon reaching 55, either on a monthly basis or through partial withdrawals.

EPF chief executive officer Tan Sri Azlan Zainol said this showed that more members were becoming financially savvy to better manage their retirement savings, in view of the increase in life expectancy of Malaysians.

He said the total applications approved for EPF’s Flexible Age 55 Withdrawals surged 42.90 per cent to 37,602, compared with 26,313 in the same quarter last year.

“The total amount withdrawn under flexible withdrawals has increased by 53.99 per cent, amounting to RM1.51 billion compared with RM981.37 million in the second quarter of last year,” he said in a statement yesterday.

Azlan said in the light of the increase in life expectancy, flexible withdrawals had gained ground among members, who had reached 55, since its introduction in 2007.

“It is heartening to note that the total applications for Flexible Age 55 Withdrawals in the second quarter had increased significantly by 178 per cent, compared with 13,533 applications during the same period in 2009, as members become more aware of the need to enhance and stretch their retirement savings.”

He said that apart from flexible withdrawals, members could also opt for lump sum withdrawals after 55.

Azlan said the increase in members’ awareness on the importance to manage their retirement savings efficiently could be seen further when total applications approved for Lump Sum Withdrawal saw only a nominal growth of 1.62 per cent during the same period, with 44,391 applications compared with 43,683 applications in the same quarter last year.

The amount withdrawn during the second quarter for Lump Sum Withdrawal amounted to RM1.86 billion, up 11.24 per cent from RM1.67 billion in the same quarter last year.

Under Education Withdrawal, total applications approved had increased 19.85 per cent to 16,677 applications during the second quarter, from 13,915 during the same period last year, with total amount withdrawn RM73.70 million compared with RM67.53 million in the corresponding period last year.

Read more: NST

Age 60 withdrawal option after EPF Act amended next year

 

PUTRAJAYA: Starting next year, private sector employees who work until the extended retirement age of 60 will have the option to withdraw theirEmployees Provident Fund (EPF) savings at the same age.

An amendment to the EPF Act 1991 will be carried out to facilitate this regulation, Human Resources Minister Datuk Seri Dr S. Subramaniamsaid.

Under the amendment, the EPF will also compel those who work until the age of 60 to continue to contribute to their EPF savings throughout their term of employment.

The amendment is in line with the private sector Minimum Retirement Age Bill 2012, which was passed in Parliament in June.

The Bill stipulated that the minimum retirement age in the private sector be raised from 55 to 60 years old.

“The EPF, after deliberations with the ministry, has decided that a 30% EPF withdrawal can be made at age 50 and the remaining at 55 years old.

“But those who don’t take out their savings at 55 can make the full withdrawal at 60 years of age,” Dr Subramaniam said after chairing the National Labour Advisory Council meeting at the ministry here Tuesday.

The council is the highest national authority governing labour issues and convened for the third time this year Tuesday.

The Star

Unions laud move to retain EPF withdrawal age

KUALA LUMPUR: The Malaysian Trades Union Congress says the decision to retain the withdrawal age for Employees Provident Fund contributors at 55 for private sector employees is “a smart move”.

MTUC president Mohd Khalid Atan said the congress had conducted a study and found that 80% of workers preferred to withdraw their EPF at the age of 55, although the minimum retirement age had been extended to 60 effective January next year.

“MTUC welcomes the decision because since the beginning, private sector employees have been given a choice either to withdraw their EPF at the age of 55 or 60,” he said.

Cuepacs president Datuk Omar Osman said the news was a relief to the employees.

“They were worried over rumours that the EPF withdrawal could only be done at the age of 60,” he said.

“It proves that the Government is paying attention to private sector employees as they are part of the nation’s workforce,” he added.

On Saturday, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said private sector workers could still withdraw their full EPF savings at age 55.

Under the Minimum Retirement Age 2012 Bill passed by Parliament recently, the compulsory retirement age for private sector workers has been raised to 60. — Bernama

The Star

EPF withdrawal remains at 55

THE Employees Provident Fund said the age for full withdrawal from the fund will remain at 55 although retirement age for private sector employees will be raised to 60 years, following the passing of the Minimum Retirement Age Bill 2012 last month.

EPF public relations manager Nik Effendi Nik Jaafar said after taking into consideration feedback from members, the government will not make any amendment at this point in time.

 

“EPF wihdrawal stays at 55 even if the retirement age is extended to 60 years old,” Nik Effendi told the New Straits Times here yesterday.

Nik Effendi was commenting on a report in an English daily which quoted Deputy Finance Minister Datuk Donald Lim Siang Chai as saying the age for full withdrawal from the EPF by contributors will be raised to 60 years and partial withdrawal to 55.

“It is a consequential move. Once we raise the minimum retirement age, we have to raise the age of EPF withdrawal as well,” Lim was quoted as saying.

Currently, contributors can make partial EPF withdrawal at 50 and full withdrawal of their savings upon retirement at 55.

However, Lim was reported as saying EPF was looking at providing a transition period for contributors who have already planned to withdraw their contributions within the next few years.

“We have not finalised the transition period, but it will be between three and five years,” he said adding that during this period, contributors who reached the age of 55 could still make full withdrawals.

MTUC secretary-general Abdul Halim Mansor was quoted as saying the union was in the dark about the reported amendment to the Employees Provident Fund Act 1991 to raise the withdrawal age.

Read more: NST

EPF takes a stake in joint venture developing Battersea site in London

PETALING JAYA: Sime Darby Bhd, together with SP Setia Bhd, is teaming up with the Employees Provident Fund (EPF) to develop the 39.1-acre freehold Battersea power station site in London with a projected gross development value of £8bil (RM39.4bil) comprising a mix of residential and commercial properties.

In separate announcements to the stock exchange early yesterday, conglomerate Sime Darby and property developer SP Setia said a joint-venture company in which the EPF would subscribe to a 20% stake would be set up.

Trading in the shares of both companies were halted for an hour yesterday but came off lower when trading resumed at 10am when the announcements were made.

In a joint press release, SP Setia president and chief executive officer (CEO) Tan Sri Liew Kee Sin said the site was undoubtedly London’s most important and central urban regeneration site. “This is a golden opportunity for the partners to make our mark as global property players,” he said.

Boats sail in front of Battersea Power Station during the Thames Diamond Jubilee Pageant on the River Thames in London on June 3, 2012. – AFP

In the same press release, Sime Darby president and group chief executive Datuk Mohd Bakke Salleh said: “London is a strategic and important target destination for property investment and development. As such, the Battersea project represents an excellent opportunity for us and our partners to expand our footprint into a key international market.”

Separately, EPF deputy CEO for investment Datuk Shahril Ridza Ridzuan said the fund “is pleased to accept the invitation from SP Setia and Sime Darby to join in the consortium following their success in securing this bid”.

“As a retirement fund and a long-term investor, we are able to appreciate the long gestation period required to extract the full potential of this development project which will ultimately enhance the returns for our contributors,” he said.

SP Setia and Sime would have an equal share of the remainder 80% stake in the joint venture. The EPF’s stake would be held via Kwasa Global (Jersey) Ltd. The joint-venture company would acquire the site for £400mil from a group of vendors together with the joint administrators and receivers of the vendors, Alan Bloom and Alan Hudson of Ernst & Young LLP.

The board of directors of the joint-venture company would consist of a maximum of 11 directors with four each from Sime Darby and SP Setia and three from the EPF.

Sime Darby said the joint venture would provide a formal working relationship between the parties and enable them to leverage on each other’s strengths in executing the project.

SP Setia said Sime Darby and EPF brought with them not only significant financial resources, but also a strong and practical understanding and appreciation of the long gestation period required to fully maximise and realise value from the redevelopment of the property.

The companies said the estimated project cost for a two-year period commencing from the date of completion of the contract (to acquire the site) was £200mil.

Additionally, the joint venture would be required to contribute £212mil to the Northern Line extension of the London underground which would see the construction of one new station near the site to improve accessibility.

Sime Darby said the project was crucial in helping the company achieve a 20% income distribution from the property division’s overseas operations by 2016 while SP Setia said the proposed acquisition represents another positive step towards expanding its international footprint in yet another highly strategic global city.

The parties said the project, which came with planning permission, would take 15 years to complete with the development involving private residential units, serviced apartments, office, retail, food and beverage and hotel properties.

“The project, in particular, is forecast to see strong capital growth on the back of regeneration plans with improved transportation facilities. The scale of the development creates the opportunity to evolve and respond to changes in life-cycles and thereby increase the value of the development,” Sime Darby added.

SP Setia said it was confident the project would be well received due to its strategic location in a development hotspot, which should be attractive to overseas buyers looking to benefit from long-term capital growth.

“The development cost of the project will be funded through a combination of internally-generated funds and external borrowings, the proportion of which can only be determined later. It is too preliminary to ascertain the total development revenue and costs, expected completion date or expected profits to be derived at this juncture,” it said.

RHB Research Institute Sdn Bhd analyst Loong Kok Wen said funding sources would be particularly crucial for this big-scale project. “The inclusion of Sime Darby and EPF has definitely strengthened the consortium’s position in securing funding. Assuming a 50:50 debt/equity capital structure for the joint venture, we estimate that SP Setia will need RM600mil to meet funding commitment for the first two years,” she said.

Loong’s forecast for SP Setia remains at “market perform”.

Another RHB Research analyst Hoe Lee Leng has maintained an “outperform” recommendation on Sime Darby. “However, we are revising our sum-of-parts-based fair value to take into account the cash outlay required for this acquisition. Based on Sime’s 40% stake in the joint venture, it will need to cough up RM800mil in cash for the acquisition (not including the amount required for the underground station) and this has reduced our fair value to RM10.75 (from RM10.90),” she said.

Meanwhile, Reuters quoting Knight Frank’s Stephan Miles-Brown, who sold the site to the joint venture, said British bidders were “noticeable by their absence”.

“In the 1980s, the Chelsea Harbour scheme was developed not far from Battersea power station,” he said. “Bovis Homes and P&O were behind that. Times have changed.”

The Star

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