A large number of EPF contributors out of 14m have yet to name their beneficiaries

By TMR / Pic By MUHD AMIN NAHARUL

NOMINATION of beneficiary is an important requirement for members of the Employees Provident Fund (EPF). It will allow the named beneficiary to manage the fund in the member’s account upon his or her death.

But there are EPF contributors who have yet to name their beneficiaries. These are the frequently asked question related to beneficiary nomination for the EPF. The answers are taken from the EPF’s website.

This article is part of The Malaysian Reserve’s (TMR) financial literacy initiative to educate the over 14 million EPF contributors on the importance of beneficiary nomination.

Q: What is nomination?
A nomination is a written declaration made by a member in KWSP Form 4 to elect/nominate individual(s) as beneficiary or as executor (wasi)/administrator (for Muslims) to administer his/her EPF savings upon his/her death.

Q: Why do I need to make a nomination?
Members are encouraged to make nomination to facilitate and expedite the withdrawal of his/her EPF savings by the nominated person(s) in the event of death. In the event that a member did not make any nomination for his/her EPF savings, his/her next-of-kin may encounter difficulties when staking their claim on the deceased member’s EPF savings.

Q: How can I make a nomination?
Members are required to submit the Nomination Form (KWSP 4) with a copy of his/her MyKad and identification documents of his/her nominee(s). The completed nomination application form has to be submitted by the members themselves at any EPF branches and must be received by the EPF during his/her lifetime.

Q: When will my nomination be effective?
The nomination takes effect on the date the nomination form is received at any EPF branches.

Q: Can a next-of-kin stake their claim when the member has named others as a nominee?
No, according to the EPF Act, payment will only be made to the person(s) named by the member as beneficiary(ies).

Q: What does the new Nomination Policy (effective Jan 1, 2017) entails?
The new policy entails:

EPF members are advised to name their spouse or next-of-kin (such as children or parents), in their nomination forms to avoid any future complications

• Introduction of a new nomination form (KWSP 4), where members are required to submit copies of identification documents of all nominees together with the nomination form. This enables the EPF to ascertain the particulars of the nominee(s), as nomination registration henceforth will no longer require the presence of a witness.
• The use of “Acknowledgement of Responsibility” form when a Muslim nominee/recipient of a Muslim EPF member’s savings applies for death withdrawal. This serves as a reminder to the wasi/administrator of his/her role and responsibilities owed to the deceased to apportion the deceased’s savings to the rightful heirs/beneficiaries in accordance with Islamic laws.
• Nomination is deemed void for Muslim members when:
a) Age of the nominee is below 18 years at the time Death Withdrawal application is submitted by the nominee or the heir.
b) Nomination is deemed void should the nominee fail to make a withdrawal application within the one-year duration from the member’s date of death, and the application will be processed as without nomination.

Q: Who can be named as a nominee?
• Muslim members: Any individual(s)
– Members are advised to name their spouse or next-of-kin (such as children or parents), to avoid any future complications.
– Or approved institution: Amanah Raya Bhd (ARB)
• Non-Muslim members: Any individual(s)
– Members are advised to name their spouse or next-of-kin (such as children or parents), to avoid any future complications.
– Or approved institution: ARB
• Responsibilities of nominee:
– Muslim members: As a wasi/administrator to apportion the deceased member’s EPF savings to the rightful beneficiary in accordance with the Islamic Law.
– Non-Muslim members: The nominee is the rightful beneficiary to the deceased member’s savings.
– If the nominee predeceased the member, the rightful applicants are the surviving next-of-kin of the deceased member.
– If the member predeceased the nominee, the rightful applicant is the nominee’s next-of-kin.

Q: What are the documents required?
• Malaysian citizen:
– A copy of identification card/MyKad/Army identification card;
– Police identification card and employer certification letter (referring to the same individual);
– A copy of identification document for each nominee.
• Permanent resident:
– Identification card (MyPR);
– A copy of identification document for each nominee.
• Non-Malaysian: (Registered as EPF member before Aug 1, 1998)
– A copy of valid passport;
– A copy of identification document for each nominee.