In efforts to reduce the burden on working Malaysians and provide more cash in their household the government has instructed the Employees Provident Fund to reduce the statutory contribution rate from 11 percent to 9 percent come January 2021.
EPF said the new remittance structure only affect employees below 60 years old, the statutory contribution rate for employees aged 60 and above remains unchanged. The new rates will apply throughout 2021, affecting wages for the months of January 2021 (February 2021’s contribution) up to December 2021 (January 2022’s contribution).
However the government pension fund is giving option to members who wish to maintain the contribution rate at 11 percent may do so by filling the ‘Borang KWSP 17A (Khas 2021)’, which will be made available on the EPF website starting Dec 1, 2020.
Employers can then assist to submit online via i-Akaun, which will begin from Dec 14, 2020. Employers are also required to keep the form received for their record.
There has been much debate in involving savings meant for retirement being used to fund Malaysians out of this pandemic, where there are two school of thoughts on the matter. Some experts believe its necessary as the government can always reinstate higher deduction when the country is more stable and better off, while some think its inappropriate to touch hard earn savings for the current crisis.
Nevertheless, the majority of people welcome the decision even if it means digging into their pockets to save themselves, the country does have the biggest pension fund program which can be used for a rainy day unlike other countries which totally rely on taxes and borrowings to wean itself out of economic situations.
Last checked, its pouring outside!
Employers are advised to contact the EPF Contact Management Centre at 03-8922 6000 or their website, all face to face visits are prohibited at the moment.
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