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EPF new Shariah-compliant savings scheme

Posted in Malaysian economy

It’s important to note another new choice for all Employee Provident Fund (EPF) members. They can choose to switch their account to Simpanan Shariah beginning 8th August 2016. The only catch is that this is subject to first come first serve basis. The initial fund size is RM100 billion. As soon as it is over, members who opted would have to wait their turn in the next yearly allocation for the shariah-compliant fund. Effective date is 1st January 2017. Once the EPF members have registered for this change, they will be notified via notice and short message service (SMS) to inform them that their application to choose Simpanan Shariah has been received and the effective date of their new account.

If there were no notification received, the members would either be in the waiting list or their contact details in the EPF system have not been updated. EPFmembers can choose just one, either EPF’s conventional fund or the Simpanan Shariah. Members must visit any EPF counter to apply and provide verification via their thumbprint for identification. For this new Shariah-compliant savings scheme, it will be advised by the Shariah Advisory Committee (SAC). The current members include Prof Dr Mohamad Akram Laidin, who is also executive director of the International Shariah Research Academy for Islamic Finance (ISRA). Other members include International Islamic University Malaysia (IIUM) Institute of Islamic Banking and Finance (IIiBF) lecturer, Assoc Prof Dr Aznan Hasan; IIUM Kulliyyah of Economics and Management Sciences Assistant Professor Dr Zaharuddin Abdul Rahman; IIUM IIiBF professor, Dr Engku Rabiah Adawiah Engku Ali and senior lecture at the Department of Shariah and Management, University of Malaya.

While the access and withdrawal procedures remain unchanged, do note that for all members of this Shariah-Compliant savings, they can only apply for a portion of their savings to be transferred to fund management institutions under the EPF-MIS which are shariah-compliant funds approved by the EPF. Members could also use it to fund conventional housing loans and Islamic housing financing, subject to the housing, withdrawal terms and conditions. For members who wishes to make payments for a nursing home that is managed by a non-Muslim is also shariah compliant as the withdrawal is for paying bills and is not against shariah principles.

Even the nomination policy for Simpanan Shariah will remain the same, including nominee(s) for Muslim members who will act as administrator (wasi) responsible for distributing the savings in accordance with the Islamic Law of Inheritance (Faraid) in line with the decisions made by the Fatwa Committee, National Council of Islamic Religious Affairs Malaysia at the 49th Muzakarah on Sept 10, 2000. Happy reading and deciding.

written on 28 June 2016

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