TOPIC1 :Social Security

- state of mind that your feel that you can cover all your
basic needs
- only cover income for those who are working
- to make people in country feel secure economically
Social security can be divided into 4 group
1. Social insurance
2. Public providence fund
3. Social assistance
4. Universal or demogrant program
1.Social insurance
-its been enforced by the government for those who are not
afford to buy insurance
-they only have enough money to satisfied their basic need
but unable to buy insurance
wealth
Those who have a lot of money and no need for insurance
They have extra money to buy insurance and have
enough money to cover
their basic needs
Example
EPF :

Government pension:

Social insurance
Poverty line

-for those who do not have money for their basic needs

Premium : are paid through the employer since the

employee do not have enough money
Coverage : just to cover their basic needs for poverty line
and for those income that are lower and equal to RM3000
a.While working
-premium is paid by the employer
Example

b.outside working environment

-premium will be shared between employer and employee
Example

2. Public provident fund ( for old age)

-when we become old, no body want to take us to work with
them
- so the employee should save money while they are working
by saving or invest the money into a fund so that they will
get benefit when they already retired.
-Example
EPF:

Government Pension:

3. Social assistance

4. Universal or demogrant program (for everybody)

SOCSO policies
-Employement injury scheme
This scheme provides coverage and protection for employees who suffers from
employment injury.
Employment Injury means a personal injury to an employee caused by accident or an
occupational disease arising out of an in the course of his employment in an industry to
which this Act applies .
Coverage
The protection under this scheme covers the following accidents:i. Industrial accidents while carrying out their duties
ii. Accidents while travelling :-

a) On a route between his place of residence or stay and his place of work
b) On a journey made for any reason which is directly connected to his
employment
c) On a journey between his place of work and the place where he takes his meal
during any authorized recess
Note:
An accident that occurs during any interruption or deviation shall not be deemed to
arise out of and in the course of his employment.
iii. Accident during emergency
An accident happening to an employee while he is in or near any premises at which
he is being employed and it occurs while assisting, rescuing or protecting other
people from disaster or danger during an emergency.
Example : Fire disaster at employer's premise

BENEFITS UNDER THE SCHEME

Medical Benefit
Temporary Disablement Benefit

Permanent Disablement Benefit

Constant-attendance Allowance
Facilities for Physical and Vocational Rehabilitation
Return To Work Programme
Dependants' Benefit
Funeral Benefit
Education Benefit

-Invalidity scheme
An insured person shall be considered as suffering from invalidity by reason of specific
morbid condition of permanent nature either incurable or is not likely to be cured and no
longer capable of earning, by work corresponding to his strength and physical ability, at least
onethird (1/3) of the customary earnings of a sound insured person.
The scheme provides 24-hour coverage to employee who suffers from invalidity or death due
to any cause and not related to his employment.
Benefits Under The Scheme

Invalidity Pension
Invalidity Grant
Constant-attendance Allowance
Survivors Pension
Funeral Benefit
Facilities for Physical and Vocational Rehabilitation and Dialysis
Return To Work Programme
Education Benefit

Why pension funding

For old age that has no job and no income
To eliminate the burden on children,employeer, employee and etc

 Maintain the same standard of living

To take advantage on investment return
Demand by union
Government legislation

TOPIC 2 : Pension benefit

Types of pension plans
1.Defined contribution pension plan

- pay in pension funding to get annual or lump sum pension

-define contribution
-in advance what participants and plan sponsor will contribute each

year

-type of contribution
-net contribution
*just to pay for retirement benefit
*Example
EPF:

-when economic are down, risk of investment return are borne by the

participant

2.Defined benefit pension plan (depends on the salary)

-specify how much money that are that will payable to employee for his or her
retirement
- define benefit

-Example : Government pension scheme

Notes
Total complete month of work will be calculated if:
-there is no working without any wages
-the person start work at 1st of every month

-to calculate the contribution rate

1)collect data
2)Invest
3)If there is not enough money the funding or employer will be responsible
-risk is borne by pension funding or employer
3) Hybrid pension plan
-the combination of contribution and benefit pension plan
-this plan are for some country who did not want the citizen get their retirement
benefit below the poverty line during their retirement age

TOPIC 3:Increasing cost individual cost method

Traditional Unit Credit
*focus on defined benefit pension plan

Actuarial Liability