KUALA LUMPUR: The Employees Provident Fund (EPF) has been granted the authority to merge accounts belonging to the same individual, the Shah Alam High Court ruled today.

In a landmark ruling, Judicial Commissioner Dr Choong Yeow Choy stated that the absence of specific prohibition within the Employees Provident Fund Act 1991 and its regulations allows the EPF to exercise its administrative discretion in merging accounts.

The court made this decision in response to a lawsuit filed by M. Divyyaa against the EPF. This legal action was initiated after the EPF merged accounts ending in 236 and 036, which belonged to Divyyaa's late father, S. Machap, into a single account.

Machap registered as an EPF member on Aug 1, 1995, under his new identity card number, receiving the account number 036. However, he already held an existing account (number 236) registered under his old identity card on Mar 10, 1984. Despite funds remaining in the older account (236) and none left in the newer one (036), Machap nominated V. K. Dharsyaini as the beneficiary for the 036 account, while leaving no beneficiary for the 236 account.

Divyyaa contested the EPF's decision to merge the accounts and its automatic designation of beneficiary.

The plaintiff argued that the EPF lacked the authority to merge the plaintiff's accounts. However, the EPF maintained that it was exercising its administrative discretion in merging the accounts.

Additionally, the EPF asserted that the nomination of Dharsyaini as beneficiary complied with all provisions under its Act, Regulations, and Rules.

The court noted that while the Employees Provident Fund Act 1991, the Employees Provident Fund Regulations 2001, and the Employees Provident Fund Rules 1991 do not explicitly grant the power to merge accounts, they also do not contain any provisions that prohibit such actions.

Furthermore, the court ruled that since the nomination remains valid, Dharsyaini is entitled to the remaining balance in the account.

"This case presents a situation where the outcome will have significant consequences for both claimants, namely the plaintiff and Dharsyaini.

"Regrettably, only one of these claimants will be entitled to the proceeds in the account.

"The defendant has no vested interest in the present suit. Its sole obligation is to fulfil its statutory duties as required," the court added.

https://www.nst.com.my/news/crime-courts/2024/06/1065001/epf-authorised-merge-accounts-following-landmark-court-ruling