Malaysia’s biggest pension fund is temporarily dropping late payment charges imposed on employers who send in mandatory monthly contributions late, and will also cut outstanding penalties by as much as 70% to ease the financial burden of companies during the ongoing coronavirus crisis.
Employers will be exempted from late payment charges as long as contributions are remitted before the end of the month, the Employees Provident Fund (EPF) says in a statement on September 13, when the measure became effective. The normal cut-off date is the 15th of every month. The initiative is valid until the end of the year.
EPF contributions are split between employers and employees. Employers contribute 12% to 13% of an employee’s salary, while the employee contributes 11%.
The EPF will also reduce outstanding penalties by up to 70%, provided employers settle in full all outstanding contributions and dividends prior to August 2021 before the end of the year.
“The significant reduction in late payment charges is aimed at assisting employers in managing their cash flows and to provide them the opportunity to settle any outstanding contribution payments,” the EPF says. Applications to lower outstanding penalties are open until December 31.
The EPF, which manages retirement savings of private sector employees and the self-employed, has more than 13 million members.