As part of its role as the custodian of members’ retirement savings, the Employees Provident Fund (EPF) has taken court action against 157 employers between January to March 2010 (Q1) for defaulting on their employees’ EPF contributions.
All 157 defaulting employers were fined by the courts totaling RM172,410. The fines, which ranged from RM1,000 to RM5,400, were for offences under Section 43(2) of the EPF Act 1991, which requires all employers to remit their monthly contributions before or on the 15th day of every month or risk facing legal actions.
“While most employers are responsible and mindful of their obligations to pay their contributions in a timely manner, it is unfortunate that some employers fail to do so and default on their EPF contributions,” said Nik Affendi Jaafar, EPF General Manager for Public Relations.
“It is important for employers to understand that the EPF does not take such matters lightly and will not hesitate to take legal actions in safeguarding our members’ retirement savings.”
The highest fine of RM5,400 was slapped on Ogosin Sdn Bhd of Wilayah Persekutuan, while Pelana Tenggara Sdn Bhd and Tri Axis Automation (M) Sdn Bhd both from Pulau Pinang, Micromagna Engineering Sdn Bhd of Perak, Sediabena Sdn Bhd of Selangor as well as Chemumur Legacy Sdn Bhd of Wilayah Persekutuan were all fined RM3,000 each.
In Q1 2010, a total of 285 civil suits and 1,868 criminal cases were filed with the courts against company directors and employers that have defaulted on their EPF contributions.
The EPF has also submitted 320 names of company directors, compared to 221 in the previous quarter, to the Immigration Department to prevent them from leaving the country without first settling their contribution arrears as provided under Section 39 of the EPF Act 1991.
The courts will usually give errant employers a maximum of six instalments to settle any contribution arrears. During this period, these employers will be closely monitored by the EPF to ensure that the amounts outstanding are paid in full. Once the full amount has been received, the EPF will credit all outstanding contributions to the respective members’ accounts.
“Looking after the interest of our members is topmost on our agenda and we will use every means available to us to ensure that members’ retirement savings remain protected.
“Nonetheless we strongly urge our members to perform their part in ensuring that their contributions are in order by regularly checking their EPF statements. Should they discover anything amiss with their account, they should not hesitate to seek clarification from their respective employer or report to the EPF immediately,” said Nik Affendi.
About the Employees Provident Fund (EPF)
The Employees Provident Fund (EPF) is Malaysia’s premier pension fund, providing basic financial security for retirement. The Fund is committed to preserving and growing the savings of its members in accordance with best practices in investment and corporate governance. It will always be guided by prudence in its investment decisions.
As a customer-focused organization, the EPF delivers efficient and reliable services for the convenience of its members and registered employers. The EPF continues to play a catalytic role in the nation’s economic growth, consistent with its position as a leading savings institution in Malaysia.
Tan Sri Syed Mokhtar AlBukhary; US$1.7 billion