Benefits – FAQs – EMPLOYEES' TRUST FUND BOARD (2024)

FAQs

How does EPF ETF work? ›

The ETF is intended to provide employees with a safety net during their retirement years. For ETF, both the employer and employee also contribute to the fund. The employee contributes 3% of their monthly salary to the ETF, while the employer contributes 3% of the employee's monthly salary to the fund.

An employee trust fund is a form of long-term savings plan established as a job benefit. The best-known forms of employee trust fund are the stock ownership plan and the pension plan. Both the employer and the employee may contribute to an employee trust fund.

To withdraw the ETF balance, you must be resigned from the current employment. If not, you can only apply for ETF benefits from past employers. The ETF balance can only be withdrawn every 5 years.

Diversification. One ETF can give investors exposure to many stocks from a particular industry, investment category, country, or a broad market index. ETFs can also provide exposure to asset classes other than equities, including bonds, currencies, and commodities. Portfolio diversification reduces an investor's risk.

What is the rule for PF contribution? A monthly salary contribution of 12% is made to the Employee Provident Fund (EPF) by both the employee and the employer. Employees are not obligated to match employer contributions of up to 12% of their income, although they are able to do so voluntarily.

An employee is entitled to membership in the EPF from the first day of his employment. It is the Employer's responsibility to enroll the employee in the EPF. The nature of the job is irrelevant. All employees should be registered whether they are permanent, temporary, casual, shift workers, apprentice.

EPF Form 31

You can use Form 31 for a partial withdrawal or to avail of an advance from the EPF account. You can access Form 31 from the UAN portal. However, you need your bank account details, PAN, and Aadhaar details to be updated on the portal to apply for EPF advance.

Disadvantages of ETFs. Although ETFs are generally cheaper than other lower-risk investment options (such as mutual funds) they are not free. ETFs are traded on the stock exchange like an individual stock, which means that investors may have to pay a real or virtual broker in order to facilitate the trade.

When can you cash out ETF? ›

Key takeaways

ETFs offer guaranteed liquidity – you don't have to wait for a buyer or a seller. This means your ETF should sell on the day you ask to sell it as long as the stock exchange is open and your instruction is received in time.

ETF issuers collect any dividends paid by the companies whose stocks are held in the fund, and they then pay those dividends to their shareholders. They may pay the money directly to the shareholders, or reinvest it in the fund.

Under this scheme, members who have sufficient savings can transfer part of the funds in your Akaun Persaraan for investments via the appointed Fund Management Institutions (FMIs), including Unit Trust Management Companies and Asset Management Companies.

ETFs pay dividends earned from the underlying stocks held in the ETF. An ETF that receives dividends must pay them to investors in cash or additional shares of the ETF. Dividends may be taxed at the long-term capital gains rate or the investor's ordinary income tax rate.

Dividends. The EPF guarantees a minimum 2.5% dividend through approved investments to ensure your savings are secured (Simpanan Konvensional). An Annual Dividend payout is credited based on your savings as at 1 January yearly. Your dividends are calculated based on your daily aggregate balance.

Safe Investment: EPF is a safe and government-backed investment option that provides a guaranteed return on contributions. Tax Benefits: EPF contributions are eligible for tax deductions under Section 80C of the Income Tax Act, making it a tax-efficient savings avenue.