1) Title

Employees Provident Fund (EPF)

2) Data
i)

Contribution

Contribution Rate
Income
Employees

Employer

Under RM5000

11%

13%

Above RM5000

11%

12%

ii)

Dividend Rate

3) Data sources

Year

Dividend Rate

2011

6.00%

2012

6.15%

2013

6.35%

2014

6.75%

2015

3.40%

http://www.kwsp.gov.my/portal/ms/about-epf/services-statistics
http://www.kwsp.gov.my/shariah/bm/index.html
http://www.kwsp.gov.my/shariah/bm/faq.html

4) Outline
Introduction
EPF is a social security institutions established under the Law of Malaysia, Employees Provident
Fund Act 1991 (Act 452) which provides retirement benefits for members through management of
their savings in an efficient and reliable. EPF also provides a convenient framework to ensure that
employers fulfill legal obligations as well as their moral obligations to contribute to the EPF for
their employees.

Malaysian Scenario
The majority of Malaysians may be in trouble when there is an emergency
because they do not have financial assets or savings bank in any form, curl
Malaysia Human Development Report 2013.
More than half or 53% of Malaysian households have no financial assets,
while one in three Malaysians do not have accounts, said the report
commissioned by the United Nations Development Program (UNDP) it.
According to the report, one of two Malaysians have no financial assets that
can be availed immediately. Malay record high scores for those who do not
have such assets.
Rural households is the highest that does not have any financial assets
(63%), compared with 45% of urban households and by ethnic group,
Bumiputera and Malay recorded the highest number of those who do not
have such assets.

"Among ethnic groups, about 57% of the non-Malay Bumiputera and 55%
Malays have no financial assets, with the figure for China and India
respectively at 45% and 44%."
"In other words, about one out of two Malays, Bumiputera non-Malays,
Chinese and Indians have no financial assets that can be liquidated
immediately, making them vulnerable in the event of loss of income or
employment shocks," the report revealed.
Although Malaysia Listed National Savings rate is relatively high, One In Three
Malaysians Still Has Reported Financial Account
One in three Malaysians also had no banking or financial accounts, while
among the group of under 40%, the figure was higher, at 50%.
"In other words, one of the two low-income Malaysians who do not have any
financial accounts. Access to formal credit (or lack thereof) can also be a
reason for the absence of financial assets," the report said.

The report said that despite the relatively Malaysia recorded a gross national
savings rate is relatively high, most of the savings came from the corporate
sector.
In addition, the report states that 88% Households Do Not Have Any Income
From Savings While 57% of Pula Record Zero Investment Income.
The report does not take into account the forced savings, such as the
Employees Provident Fund (EPF), because they do not have access to the
reserve in the event of shocks to income or employment.
Citing figures from the Household Income Survey (HIS), the report also states
that nearly 90% and 86% of rural households and urban areas, respectively,
had no savings, while the majority of households in the 88% do not have any
income from their savings.
Meanwhile, 57% of households in Malaysia have reported zero income from
investments, the number of households in urban and 50% rural households at
66%, according to figures taken from the dividend income earned.
Data From EPF Reveals Nearly 70% of the Malaysian People Aged 54 Years
Has Less Than RM50,000 Savings Expected Only Able To Accommodate Life
Less Than Five Years
The breakdown of data from the EPF savings in 2013 shows the same
information alarming: 90% of Malaysians nearing retirement age do not have
enough funds to maintain a basic lifestyle for more than five years.

"Data from the EPF showed at the end of 2013, about one-fifth of Malaysians
who are approaching retirement age (between the ages of 51-55) had less
than RM20,000 in savings, while nearly 70% of those in the age 54 years
have savings of less than RM50,000.
"In other words, assuming a monthly expenditure of RM900 per month, a
savings that can maintain their basic living for 1.8 years, while for the latter,
the figure stood at 4.6 years."
It Also Explains Low EPF savings attributable to the fact that majority of
Malaysians Earned Income Lower
"Distribution of monthly salary to the EPF showed that in 2013, one-third, or
2.1 million active members earning less than RM1,000, over three quarters
(76.8%) earn less than RM3,000, and about 90% earning less than RM5,000
per month.
"As expected, inequality in compulsory savings rather extreme, where the top
1.7% of EPF depositors have more savings than the entire bottom 57%
savings combined," the report said.
Conclusion
EPF ensure your savings are secure and have a reasonable dividend. Fund the
dividend of 2.5 per cent per annum. To ensure the payment of dividend, the
EPF invests your contribution approved financial instruments in order to
obtain optimum returns.