KWSP (EPF) Nomination………..why?
17 September, 2011 Leave a comment
There was a chain letter that mentioned that once a nominee (beneficiary) of the KWSP account dies, the whole nomination becomes void and ALL THE MONIES will be handed over to AMANAH RAYA as trustee. THIS IS FALSE
Here are few things to understand about the nomination process:-
- A KWSP nomination supersedes all wills
- A fresh nomination will supersede all earlier nominations
- Muslim and non-Muslim nominations are treated differently
- Where there is a nomination, for non-Muslims, the money will be distributed as per nomination and percentages
- For non-Muslims, if the nominee/s has/have died, then only that portion of the proceeds will be handed over to the trustee and acted upon as required by law. Those still alive will receive their monies as per the percentages
- For beneficiaries below age 18, KWSP will hold the money and release to the beneficiary upon attaining age 18. However, the administrator and at the discretion of KWSP, can apply for release of money for their upkeep
- For Muslims, the nominee will receive the monies as an ADMINISTRATOR and not beneficiary, and distribute the monies according to the Islamic Distribution law (FARAID). One important responsibility will be to settle all debts of the deceased contributor, both financial and religious, before the beneficiaries can receive their money
In the event of no nomination being made:-
- A sum of RM2,500 will be paid to the next of kin.
- A second payment up to RM17,500 or balance in KWSP account, whichever is lower, will be paid to the next of kin after two months from the date of the member’s death.
- The balance of the savings will be paid upon producing the Letter of Administration/Grant of Probate/Distribution Order/Faraid Certificate from the party that administers estates such as Amanah Raya Berhad or the Court or the Land Office, respectively. This process to obtain documents can be time-consuming and costly.
With nomination, you will be spared all the hassle and costs. Actually with all the KWSP offices around town, there is no reason to delay updating your nomination