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  What is provident fund?

                   Provident fund ("the fund") is a fund set up voluntarily between employers and employees. Asset of the fund consists of money contributed by both employers and employees. This means employees are not alone in saving the money, employer help them at the same time. The contribution to be made by employer will always equal or exceeding that contributed by employees.  Therefore, set up of provident fund can be regarded as a kind of benefit that could  motivate employees to work with employer.        

                   Provident fund not only provides a tool for employees to save consistently with the employer's assistance, asset of the fund is further managed by a professional called "Asset Management Company" The benefit derives from management is distributed to member of the fund proportionately. 

                   Members saving could increase over time as there is a monthly contribution from both employer and employee, as well as incurred benefit from the investment of the fund. However, the fund will not pay interest or dividend to members as it is designed to accumulate into a large amount and pay to members  upon their termination of membership. Moreover, members are not entitled to withdraw part of their saving before termination of membership since it is not in accordance with the objective of saving for retirement. 

                 Upon termination of membership from the fund, members will receive all of their contribution and its incurred benefits, and will receive a certain amount  of employer's contribution and its incurred benefits according to the fund article. 

                In case of resignation, members can choose to temporarily keep their money within the former fund before transferring it to the provident fund of their new employers. This will allow members to seamlessly maintain their retirement savings in the provident fund system. As a result, member will have enough savings when they reach a retirement age and have a good quality of life after retirement.  Besides, money received from a  provident fund upon retirement is tax exempted.

               Rights and duties

               Tax benefit

               Payment of benefits to employees upon membership termination

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Last update : March 7, 2007

 

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