Pencen Vs KWSP

What had you plan for your retirement? I guess this might strike some attention to those who might have a choice to choose between getting pension or KWSP. This happens to all the government servant. Based on the information gained from " Tawaran Opsyen Skim KWSP dan Perbandingan Skim Pencen Dengan Skim KWSP" by "Bahagian Perkhidmatan Jabatan Perkhidmatan Awam Malaysia", I would like to give some personal opinion.

Pension is a scheme given to the government servant that entitle with some benefits:

•  The worker does not contribute to the pension 
•  It is a family pension scheme where they are entitle to a lump sum of reward ( 7.5% X duration of service X last pay) and the pension  ( 1/600 X duration of service X last pay). The benefits of pension are given to the worker as long as he live or if pass away shall be given to his spouse or the children if they are under 18. 
• Besides that the worker are given the golden handshake with the rate of  (1/30 X leave accumulated of maximum 120 days X last pay) 
• Medical benefits in and after service for spouse and children. Medical benefits for parents are entitle when the worker is in service.
• When the worker pass away the pension and reward shall be given to the spouse or children.
• The benefits of lossing ability during working period shall be paid as given rate depends on the level of disability
• If there are increment to the salary, the pensioner will get increment too.
• Those that are pension can be pension by the options of mandatory, health reason, the termination of the post, reorganizing the organization, due to public benefits, due to government demand as well as being appointed by some organization.
• No taxation on the reward and Golden HandShake.  

Meanwhile for those that chose the KSWP skim, they are entitle with benefits such as:

• The government need to contribute 12% while the worker need to contribute 11% for KWSP
• Entitle to receive the Golden Handshake
• Medical benefits only during in service and after retirement such benefits are withdrawed
• No monthly pension given
• They need to pay back all the loan.
• The family members will receive RM 2000 if the worker pass away or suffer from disability during work.
• Can quit the job at any time.
• May receive KWSP dividen
• May escape taxation by the limit of withdrawal RM5000 a year or depends on the current rules. 

Hence which shall I choose from. 

If you have any question you can try to contact 

Bahagian Pencen atau Urusan Opsyen KWSP

Bahagian Perkhidmatan at 03-88853000

or http://www.jpa.gov.my