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” The Employees Provident Fund (EPF) will introduce a new scheme on April 15 to defer, restructure or reschedule employer contributions to improve cash flow.”

CLOSURE OF EPF BRANCHES DURING COVID-19 MOVEMENT CONTROL ORDER FREQUENTLY ASKED QUESTIONS (FAQs)
https://www.kwsp.gov.my/documents/20126/131...19_FAQ+_Eng.pdf

This post has been edited by GrumpyNooby: Mar 28 2020, 10:12 PM

(March 27): Prime Minister Tan Sri Muhyiddin Yassin has announced measures that will lighten three employer commitments to address the cash flow constraint that is weighing on businesses that have been affected by the COVID-19 outbreak.
The first is the introduction of a programme that will allow employers to postpone, restructure, or reschedule their mandatory Employees Provident Fund contribution for employees. The EPF will introduce this programme on April 15.
https://www.theedgemarkets.com/article/govt...iness-cash-flow

Is this gonna be a mandatory cut for employers statutory contribution ?

Assume it's mandatory..
Well it's for the good I guess...
Everything slowdown now...

Shit... the epf dark age has come under PengkhianatNegara

The government should not use EPF's member's retirement fund to save the employers. Find other ways to do so.

By allowing employers to say delay payment for 9 months, it is the employees who are losing out as the deductions and employer contributions will be missing out on the dividend declared for the year.

Furthermore, what if the employers still go belly up before payment settlement into EPF?

The government should have had considered the versions now practiced by certain governments of covering 50% of all employee's pay of those impacted up to say RM 2K absolute and by that way, reduce's employers' financial burden.

if a company go belly-up before settling EPF:
https://asklegal.my/p/company-bankrupt-owe-...-corporate-veil
--snippet--
Other laws and (possibly) lawsuits
Other than the Companies Act, there are various other laws that specifically allow for the directors of the company to be personally liable for certain debts of the company. Two prominent and good examples of this are the Employees Provident Fund Act 1991 (“EPF Act”) and the Income Tax Act 1967 (“ITA”).

Section 46 of the EPF Act makes the directors of the company jointly and severally liable for the company’s unpaid EPF contributions. Similarly, section 75A of the ITA provides that where any tax is due and payable under the ITA by a company, any person who is a director of that company during the period in which that tax is liable to be paid, shall be jointly and severally liable for such tax that is due and payable. “Director” in section 75A has a special definition i.e. someone who is occupying the position of director (by whatever name called and includes any person who is concerned in the management of the company's business) and either directly or indirectly has control of not less than 20% of the ordinary share capital of the company.

The rationale behind this is that the separate legal entity / limited liability concept should not be used as a shield to evade liability towards employees and the tax authority.

One interesting issue is whether a director can be held personally liable for tortious acts (e.g. negligence or defamation) committed in the course of acting as director on behalf of the company. A tort is essentially a legal right to sue someone for a wrong-doing, even though the parties may not have any contractual relationship between them.

https://www.thestar.com.my/opinion/letters/...-their-epf-duty
They must ensure that mandatory EPF contributions for their employees are made in a timely manner.

This is crucial because company directors are jointly and severally liable should the company fail to remit EPF contributions.

PS: Of course one can argue, what if directors also bankrupt?
By then, personally, i think it's beyond finger pointing liao. While i'm an employee/worker-ant only, i do sympathize with businesses where the owners/directors do their best to keep the biz going not only for themselves but also for their employees. They take on the risks & stress..

This post has been edited by wongmunkeong: Mar 29 2020, 03:20 PM

The spirit and actual interpretation (I think, as I am not a lawyer) of these laws are to make sure no foul play or ill intention.

however, when a firm goes bankrupt, this needs to go to bankruptcy court to settle priority of debts etc. Isn't this unfair to employees that their EPF contribution (from the employers) which would have been safe in EPF accounts now become part of the debt owed by the defaulted firm?

For example. Let's say with or without this program, the firm would still go belly up in Dec as the economy is really bad. No fault of the directors or the firm.
Without the program, the employees' EPF money all would be put into the EPF accounts promptly (else its a wrong doing and against the law) until the firm goes bankrupt in Dec.
Now with the program, the employees' 9 months EPF contribution (which is practically 1 month pay = 12% x 9 months) is gone. How to sue the employer? is this fair to both employee and employer?

This post has been edited by Wedchar2912: Mar 29 2020, 07:48 PM

er.. i'm not a lawyer too, just an IT fler.
based on my understanding - when a Co. bankrupts, the directors are still personally liable for unpaid EPF.

For me, "fair "enough" given current & foreseeable year or so situation
VS
other possible options/results like causing deaths of large swath of companies by over-stressing short-term cash flow. This will have a major back-lash to the country's economy & our personal economy.

IMHO, no such thing as "perfectly fair" - sometimes we have the advantage, sometime we have to eat crow - janji can continue to live & fight on another day.

OT a bit
I usually poke fun at friends when the b*tch about "not fair":
"Life aint fair, we won when 200K+ other sperms loss the race. Fair or not fair?"
sorry if waaaay out there - just sharing a off-standard view on life

This post has been edited by wongmunkeong: Mar 29 2020, 09:11 PM

I just read the stimulus plan takes 50b from EPF. That means less money earning money for us right? Meaning the 50b is not generating profit for members and later reduced interest payout. Please comment.

Where did you read that?

From what I understand, only about 10% of the stimulus package is direct injection, while the rest are relief measures, which include allowing people to withdraw from their EPF account 2. That’s probably what the MYR 50bn is referring to

and this is also assuming every member takes $500 per mth from their Acct-2 for the next 12 mths.

iLestari withdrawal can be done online right?
No need to go the nearest branch to do fingerprint verification?

I dont think so...imagine all applicants crowding the EPF offices on 15-April to get the fingerprint thingy done.
Gonna be awful..

cant find original article but this mentions something similar https://www.thestar.com.my/business/busines...smes-marc-urges. even for withdrawal I doubt epf has that much cash for immediate withdrawal unless they have been sitting on piles of cash, which in turn is earning less. anyway my point is this seems like short term fix but has long term ramifications. Govt should not touch epf money at all. Giving you money now, pay less dividend in future and seems unfair for those that do not withdraw.

Since when life is fair sure, complain about it, but it’s not going to change the fact that the government is implementing it, and some people’s short term survival depends on it. I don’t think anyone here works for EPF and has full access to its financial standing, so speculating if it has that much cash to dispense is moot.

What else we can do about it then? Here are some of my suggestions:

We can shrug and take it as a bad investment year, and just keep earning salary contributing to it. Or we can withdraw it and put into other investment (eg: share market, unit trusts) and hope they return better.

EPF Members Can Apply For RM500 Monthly Withdrawals Starting From 1 April 2020
https://ringgitplus.com/en/blog/personal-fi...hv4qkldQGkFBC90

actually my question was a 2 parter, if 1 is true what do we do and you had given suggestions. Am actually deciding if I should take and settle part of house loan since i believe the return will be slightly higher than fd rates in the coming months.

Anyone noticed that apart from the Lestari withdrawals, EPF has been instructed to take up Rm50 billion of the whole scheme?

Yes....in essence, the rakyat are funding themselves to certain extent.