Guide to mandatory retirement scheme

The Malaysian Reserve

December 23, 2013

Among the remunerations that be ca deducted under the Employees Provident Fund include commissions and wages for study leave.

 

by Hann Liew
PETALING JAYA: Last week, in SaveMoney.my’s guide, we explained about the Employees Provident Fund (EPF) and your responsibilities toward it. This time around, we’re back with more about your contributions to Malaysia’s EPF.

What types of income are included for EPF deductions? In general, all payments which are meant to be wages are accountable in your monthly contribution amount calculation.

These include:
• salary;
• payment for unutilised annual or medical leave;
• bonus;
• allowance (except travelling allowance);
• commission;
• incentive;
• arrears of wages;
• wages for maternity leave;
• wages for study leave;
• wages for half day leave; and
• other payments under services contract or otherwise.
Meanwhile, the fol lowing payments are not liable for EPF contribution:
• service charges;
• overtime payment;
• rewards (in kind);
• retirement benefits;
• retrenchment, temporary and lay-off termination benefits;
• any travelling allowance or the value of any travelling concession;
• payment in lieu of notice of termination of employment; and
• director’s fee.

What is the Rate of Contribution to the EPF
Employees below 55 years of age — For employees earning below RM5,000, the portion of the employee’s contribution is 11% of their monthly salary, while the employer contributes 13%.

For employees who receive wages/ salary exceeding RM5,000, the employee’s contribution of 11% remains, while the employer’s contribution is reduced to 12%.

Employees between 55 years and 75 years of age — For employees who have wages of RM5,000 or below, the employer’s new share contribution rate is 6.5% (an increase of 0.5%).

For employees earning more than RM5,000, the employer’s share contribution remains at 6% subject to the total of the wage.

Voluntary Excess Contributions to the EPF
If you or your employer intends to contribute at a rate which exceeds the Statutory Rate, either you or your employer may do so by giving a notice of your intention to the EPF.

To do so, your employer is required to complete Form KWSP 17 (employer) while you are required to complete Form KWSP 17A (employee).

This new rate will be your new Statutory Rate. Upon receipt of the notification, your employer is required to comply with it, as instructed by the EPF.

How are My Contributions Paid?
Your employer must contribute part of your wages along with the employer’s share to the EPF according to the rates specified under the EPF Act 1991. These contributions must be paid monthly.

To do this, your employer has to deduct part of your wages before they are paid to you.

This deduction, together with the employer’s share, must reach the EPF before the 15th day of the following month; any later than the specified date and they will be fined by the EPF. It is an offence under the EPF Act for your employer not to deduct your wages and not to remit the contributions to the EPF after deduction has been made on your wages.

If your deductable wage is RM2,000 a month:
Net amount to employee after EPF deduction: RM1,780 (ie 100%- 11% = 89% of deductable wage);
Employee Contribution: RM220 (11% of deductable wage);
Employer Contribution: RM260 (13% of deductable wage);
Amount payable to EPF by employer: (RM220 + RM260) = RM480.

So now you are aware of how much you contribute, but what happens with the money?
Part 3 of SaveMoney.my’s guide to the EPF will explain all next week.
Hann Liew is the founder and editor-in-chief of SaveMoney.my, an online consumer advice portal which aims to help Malaysians save money.

Health and beauty remain top sectors for year ahead

Report from Bangkok Post dated 20 December 2014 :-

Health and beauty remain top sectors for year ahead
Medical services and beauty care offer the brightest prospects for growth for a fourth straight year in 2014, driven by growing awareness, according to a survey of the University of the Thai Chamber of
Commerce (UTCC).


Growth will also be supported by Thai medical treatment, especially at private hospitals, which are recognised by local and foreign patients for their quality and affordable cost.
 
Medical services and
beauty care top the list of 10 "sunrise" businesses named by 4,400 members polled by UTCC, based on sales, import and export statistics, commercial banks' credit information, capacity utilisation and the
the country's economic prospects. The survey assumes economic growth of 4.5% next year, plus growth in exports (6.5%), domestic consumption (3%), investment (6.9%), industry (5.9%), the farm sector
(2.4%) and inflation (3%). Strong telecom demand, spearheaded by the full roll-out of the third-generation (3G) network, is expected to accelerate the growth of the tech industry.
TV also holds promise with the advent of the digital system, which will drive spending on network expansion and advertising. The rise of social media, meanwhile, is seen boosting growth in event organization activity. Thanavath Phonvichai, UTCC's vice-president for research, said the plastics business is still growing with robust demand for food and drink packaging, while the Asean Economic Community and desire for  higher learning will spur education-related business. Other areas with an outstanding outlook include tourism, chemicals, life insurance, property development and energy. Sluggish sales are predicted for electric fans, printers, mom-and-pop shops, leather, fabric and handicrafts.
      





       

A guide to travel insurance – Part 2

December 20, 2013

 

By Balkish RoslySaveMoney.my began our guide to travel insurance last week by explaining exactly what it is and what it entails. This week, we continue with an explanation of the types of travel insurance policies.

Read on to learn more!

Types of travel insurance
Before you march up to the insurance company or click the “purchase” button on the airline website, you have to first decide which type of plan suits you best. So how do you find out? It depends on the following factors:

1. Coverage area
Planning a holiday? Great! But first of all, where are you heading? From what we can suss out, there are three major coverage areas included in the travel insurance plans:

Domestic The domestic travel insurance cover areas within Malaysia only and generally has the cheapest premium (our research shows this can start from RM11 and above). Basically, the domestic plan will cover the expenses of any accidental or loss that you might experience while travelling within Malaysia. On the other hand, this type of travel insurance sometimes lack the extensive coverage and protection that comes with other bigger coverage areas.

A quick note: Premium means the cost of insurance, i.e. how much you have to pay in order to get the insurance.

Asia Usually, Asia basically means just that – the whole of Asia countries such as China, India, and the slew of Arab countries. However, some insurance companies do tend to separate these countries into South East Asia (or ASEAN) and Asia Pacific region. While it is less comprehensive, this could actually be a good thing – purely because you might just get a cheaper premium if the insurance company split up the region and covers less countries. For example:

Travel insurance company Insurance Name
Coverage Area
Premium Range (RM)
Lonpac
TravelNet (South East Asia)
Malaysia, Singapore, Indonesia, Thailand, Brunei, Philippines, Vietnam, Myanmar, Laos, Cambodia
RM18 To RM125 (VIP)

Lonpac
TravelNet (Asia Pacific)
South East Asia, China, Hong Kong, Macau, Taiwan, Korea, Australia, New Zealand, Japan, India, Bangladesh, Pakistan, Sri Langka
RM26 to RM138 (VIP)
So if you are boarding a plane to say, Thailand, you can actually get a cheaper premium price.

Worldwide Similar to the ‘Asia’ definition, Worldwide also sometimes consists of several categories. The most common that we’ve come across are: Worldwide including USA and Canada (usually comes with a higher premium) and Worldwide excluding USA and Canada. Also remember that the worldwide category tends to cost way more than the Domestic and Asia regions, mainly because it covers more areas on the globe. Basically, when you purchase this type of insurance, you will be protected in all the major countries in the world (lost your luggage in Timbuktu? No problem! You will be compensated by your insurance provider). But obviously this comes with a price, as Worldwide is usually the most expensive option.

Stay tuned next week for SaveMoney.my’s next instalment, as we cover another factor that’s important to selecting your type of travel insurance, as well as detailing where to get them.
Balkish Rosly is an Investigative Journalist of SaveMoney.my, an online consumer advice portal which aims to help Malaysians save money through smart (and most of the time painless) savings in their daily banking, technology, and lifestyle spending habits.

More Singaporeans go online to shop for festive gifts

More Singaporeans go online to shop for festive gifts
The most popular countries from which those in Singapore purchase goods include the United States, China, South Korea, Japan and Britain.

By Victoria Barker, Lim Yi Han,
MyPaper | 19-12-13

 

'Tis the season to be jolly - and, typically, to brave the heaving crowds in the malls in order to get all that Christmas shopping done.

However, a small, but growing, number of Singaporeans are eschewing visiting physical stores and heading online instead to do their festive shopping.

One of them is pre-school drama teacher Grace Lim, 30, who has done about 90 per cent of her gift-shopping on the Web.

"I'm too tired to battle the hordes of die-hard shoppers," she said.

Industry players told MyPaper they have been handling more transactions here in the lead-up to Christmas this year compared to the same period previously.

The most popular countries from which those in Singapore purchase goods include the United States, China, South Korea, Japan and Britain.

A United Overseas Bank survey of 500 Singapore residents released yesterday found that 35 per cent of all Christmas shopping is being done online, compared with 28 per cent last year.

Last month, the volume of Speedpost parcels increased by 10 per cent compared to November last year, a SingPost spokesman said. This is on top of an already higher-than-usual volume - between 10 per cent and 20 per cent higher - it usually sees during the year-end holiday season.

The spokesman added: "The availability of (various) payment options and modes of delivery, as well as the flexibility to shop anytime, anywhere, help to spur online shopping."

Logistics provider Fedex Singapore said it expected the first week of this month to be its busiest of the year, with more than 85 million shipments moved globally, a 13 per cent increase compared to last year's busiest week.

Managing director Khoo Seng-Thiam said popular items in inbound shipments include apparel, health supplements, personal consumer electronics and books. He noted that with a relatively strong Singapore dollar this year, "overseas online shopping makes sense".

Online payment website PayPal told MyPaper that Cyber Monday and Black Friday - the day after Thanksgiving - have gained momentum in Asia due to the deep discounts offered by major brands.

Singapore purchases from US merchants surged by 21 per cent from 2011 to last year for these days, with the trend expected to continue this year, said Mr Lawrence Chan, PayPal's general manager and vice-president of Asia-Pacific merchant services. Figures for this year were unavailable .

But some, like marketing manager Michelle Sim, 29, still prefer being hands-on when it comes to festive shopping.

She said: "I like to be able to actually check for things like size and quality before I buy."

A guide to travel insurance

A guide to travel insurance - Part 1

December 18, 2013

Let’s face it, while danger and accidents can happen in every corner in the world, even the slightest mishap can ruin your perfect holiday.

 

By Balkish RoslyFor all the joy and excitement that a trip holds – new places, new faces, new food! – there is also the potential for disaster: lost luggage, flight delays, and – uh-oh – missing passport…

Let’s face it, while danger and accidents can happen in every corner in the world, even the slightest mishap can ruin your perfect holiday.

Additionally, the horror of these scenarios could be magnified when experienced overseas, especially in a land with a foreign language. H

owever, one of the ways to protect yourself when you are on a trip aboard is by getting a travel insurance policy. SaveMoney.my explains what this consists of.

What is travel insurance and its coverage?
Just like health insurance and their protection plans, travel insurance also provides you with a protection plan for any hiccups that you might experience during your trip. If any accidents do occur while you are away from home, your travel insurance will ensure that you will be compensated accordingly.

What sort of coverage / protection can you expect from a travel insurance?
Ideally, a travel insurance should protect you in covering both medical concerns as well as travel issues. Some of the coverage that you should expect to be in the product disclosure sheet are as follows:
Personal Accident
Medical Expenses
Loss of Luggage & Personal Effects
Loss of Travel Documents
Baggage Delay
Travel Delay
Missed Departure
Flight Overbooked
Hijack Inconvenience
Travel Cancellation
Loss of Money / Valuables
…and other types of coverage as well; go through the list carefully and take note of any particular areas of concern for you, as your needs will vary based on your destination and conditions.

What conditions are NOT covered by travel insurance
Most often than not, insurance companies steer clear of high-risk and unpredictable situations such as war, destruction of goods caused by radiation, as well as high-risk sports activities. So if you are a journalist / humanitarian covering a report in country torn by war, or if perhaps you may travel to take part in a high-risk skiing (or other equally dangerous sport) competition, then you should probably be aware that a travel insurance policy might be redundant in your situation.

Here are other examples that might not be covered in a travel insurance policy:

Declared or undeclared war or any act of war, invasion, act of foreign enemy, and other war terms
Loss or destruction of goods due to radiation

Suicide / Self harm / or any intentional acts by the insured person that provoked homicide or assault

The Insured Person acting as a law enforcement officer, emergency medical or fire service personnel, civil defense personnel or military personnel of any country or international authority, whether full-time service or as a volunteer.

The Insured Person engaging in, practising for, or taking part in training in any speed contest, any professional competition or sports, and participating in Hazardous Adventure.

Now that you’ve got a better idea of what Travel Insurance does (and doesn’t) entail, and if you’re keen to get some, stay tuned next week for SaveMoney.my’s next instalment of our guide, where we’ll be discussing your options to do so!

Balkish Rosly is Investigative Journalist of SaveMoney.my, an online consumer advice portal which aims to help Malaysians save money through smart (and most of the time painless) savings in their daily banking, technology, and lifestyle spending habits.

Currency of the future or asset bubble? Bitcoin's critics get louder

Currency of the future or asset bubble? Bitcoin's critics get louder


Bitcoin tokens in Sandy, Utah on April 3, 2013. Once the preserve of cyber geeks or of dodgy traders, the virtual currency bitcoin can now not only be used to buy goods online but also pay for a degree at the University of Nicosia

PARIS (AFP) - Once the preserve of cyber geeks or of dodgy traders, the virtual currency bitcoin can now not only be used to buy goods online but also pay for a degree at the University of Nicosia.

Yet the newfound popularity of the currency, which was worth almost nothing until April 2011 and which now trades at around US$1,000 (S$1,254), may well prove its undoing.

Market watchers and regulators are at odds over how the bitcoin should be handled, but as the currency gains prominence, voices warning against its use are getting louder.

France's central bank has slapped it down as "highly speculative" while China's said it should not be used as a currency and banned its banks from providing services and products related to bitcoin.

Financial obstacles to face before turning 30

December 13, 2013

You don't need to have your entire future planned, but you can make some wise decisions to set the foundation before you turn 30.

 

By Michelle Brohier
Entering the working world and handling the salary you receive can be overwhelming, and when you’re new to the concept of a wage; the salary looks like a bigger allowance for you to spend with.
But if you continue to have that mindset throughout the years, you may face serious money problems in future. While the way you handle your money is your prerogative, it still pays to deal with it properly while you’re young. You don’t need to have your entire future planned, but you can make some wise decisions to set the foundation before you turn 30.

Find yourself while finding money
Not everyone knows who they want to be, not even til their dying days sometimes. Being in your 20s often gives you the perfect time and circumstances to grow and learn about yourself no matter the path you take, as long as you are conscious of the decisions you’re making. But just because you’re keen on discovering who you are, that doesn’t mean money should take a back seat. You can still find yourself by taking on a job of your interest, or even a side job as you pursue your own passions. You should earn enough to let you live comfortably without struggling to pay for necessities.

Work on your student loans
Student loans are the bane of most young graduates’ existence as not everyone can pay them off in time to make way for home and car loans, but that doesn’t mean you should feel discouraged. Try to get ahead by paying more than the monthly minimum amount necessary as this helps stave off more interest from accumulating. Keep a tab on your loans and be sure that you are paying enough to cover more than the interest, or else you’ll be paying for your loan the rest of your life.

Maintain your EPF
When you get a job, make sure that the company you are working for is contributing a part of your salary to the Employment Provident Fund (EPF). There are a few young employees who do not see the importance of this fund as it eats into their full salary and they need all the money for their current needs. But with more people living to a ripe old age without a sufficient retirement pot, even a small contribution to this fund could be the security net you need for your future, so keep contributing as much as you can. Also ensure your employer is fulfilling his responsibility in contributing the requisite amount as well.

Work on your credit score
If you were a little credit happy in the past and you’re still trying to sort through your debt, now’s the time to fix those mistakes. It’s important to get your credit score in order as you’re going to need it for most financial plans you may have in the future.

Making an investment without your parents’ aid
Whether it’s a car or a house, if you have enough money to invest in something, go for it. The journey and process of making such large purchases on your own will be a good experience that teaches you to commit to your money and how to deal with necessary payments accordingly, and it’s an experience you can carry throughout your years. Do your research before making any investment to ensure the investment is legitimate; that the car you’re purchasing is in good shape or that the deal on the house really is a good one. Of course, it’s also vital that you are sure you can afford the mortgage, loan or any continuous payments you will be saddled with henceforth.

You may have made some financial mistakes along the way, but keep learning and keep growing. There may be a number of obstacles to face when you’re young and you may feel unprepared for them all, but tackling them head on will teach you what you need to know. So that when you turn 30, you can at least say you’ve gained enough experience to face the next phase of your life.

This was brought you by MICHELLE BROHIER from RinggitPlus.com. RinggitPlus compares credit cards, personal loans and home loans to help Malaysians get more for their money.