PEOPLE.IDEAS.PERFORMANCE

110 The contribution rates to SOCSO are based on the total sum of the monthly wages received by an employee. Contribution begins in the first month when the employee commences employment. There are two categories of contribution. In the first category, the rat es of contribution comprise of 1.75% employer’s share and 0.5% employee’s monthly wages. The rate of contribution under the second category is only 1.25% of the employee’s monthly wages solely borne by the employer (SOCSO, 2017). For Employment injury and Invalidity schemes, all employees who have not attained 60 years of age are required to contribute under the first category, except those who have attained 55 years of age and have made no prior contributions before they reach 55 years. The second category covers employees 60 years old and above and still working, employees above 55 years old when he first registers and contribute to SOCSO and, for an insured person receiving Invalidity Pension and still working and receiving less than 1/3 of the average monthly wages before the invalidity. Under this category, the contribution is paid by the employer for the Employment Injury Scheme only. 5HWLUHPHQW %HQHILWV The mandated retirement benefits are governed by (PSOR\HHV 3URYLGHQW )XQG $FW and 3HQVLRQ $FW . The Provident Fund Act 1991 (Act 452) is an act to provide for the law relating to a scheme of savings for employees' retirement and the management of the savings for the retirement purposes. Under the Act, all employers and employees (except government workers, foreign workers, expatriates and domestic workers) must contribute to the Employees Provident Fund (EPF). The EPF is a social security institution which provides retirement benefits for Private and Non-Pensionable Public Sector employees. The EPF in Malaysia was established on 1951 (EPF, 2017). The EPF scheme is a type of a defined contribution (DC) scheme, fully funded and publicly administered by the EPF as a statutory body under the supervision of the Ministry of Finance. The contributions are paid into employees’ individual retirement account. This account is credited every year with a dividend rate subject to the fund’s investment return. The guaranteed minimum return rate is 2.5%. The EPF, as of September 2016, has a total of 6.83 million active and contributing employees and 541,503 active employers. The current EPF contribution rate is in accordance with the wage/salary received. For employees who receive wages/salary of RM5,000 and below, the portion of the employees’ contribution is 1 1% of their monthly salary while the employer contributes 13%. For employees who receive wages/salary exceeding RM5,000 the 11% contribution remains, while the employer's contribution is 12%. However, for a period of one year beginning 1 June 2003, the EPF contribution by employees is reduced from 11 per cent to 9 per cent. (EPF, 2017) The retirement benefit for government servants is governed by the Pension Act 1980 (Act 227). The Act provides for the administration of pensions, gratuities and other benefits for officers in the public service and their dependents. Nonetheless, employees in the government sector are given choices to choose the retirement benefit under EPF or the Pension Scheme. Tolos, Abu-Bakar and Yusof (2014) found that plan feature is one of the factor influencing the choice. The pension is paid on a monthly basis after the completion of service. After the death of the employee/retiree, the pension money will be handed over to his wife and children. The pension benefit includes service pension (monthly payment), service gratuity (lump sum payment) and cash award in lieu of leave (JPA, 2017). In addition, the government retirees are eligible to access the public hospitals and receive medical treatment for a very minimal cost. The Pensions Trust Fund Act 1991 (Act 454)(Kumpulan Wang Persaraan) was enacted to assist the Federal Government in funding its pension liability. With the enactment of this Act, the Pensions Trust Fund was established on 1 June 1991 with a launching grant of