My Credential

Corporate Investment Advisor for MAPAN (Majlis Aspirasi Pemangkin Nasional)
Corporate Investment Advisor for Globe Departmental Store
Formerly a Remisier with HLG Securities

EMPLOYEES’ INCENTIVE SCHEME

EMPLOYEES’ INCENTIVE SCHEME
REVISED MARCH 2005


By

Ahmad Najib Bin Ahmad



EMPLOYEES’ INCENTIVE SCHEME (REVISED MARCH 2005)

Public Mutual is happy to present our Employees’ Scheme to employers/ organizations in their effort to reward their employees / members effectively.

This scheme has been designed with the following objectives in mind :

 To motivate employees and encourage good performance at work
 To encourage employee loyalty and maximize staff retention

Under this scheme, the employers/ organizations makes a predetermined/ agreed contribution to the employee’s account in a unit trust fund based on specified criteria such as performance, length of service, rank and etc.

The contribution is maintained in the individual accounts of which the first holder is the employer and the second holder/ joint holder is the employee. Withdrawal from the accounts may be made as long as conditions set out in the agreement are met.

The agreement is may be draft to suit the needs of your organization. The agreement shall contain all terms and conditions for the execution and administration of this scheme.

Normally, a vesting schedule which exemplifies the manner in which the employer makes the contributions would form part of the agreement.

We include herewith 2 sample vesting schedules for your review. Vesting schedule I and vesting schedule II. These are illustration purposes and the management is advised to devise a vesting method most suitable to its organization, taking into account its organization structure, management objectives and etc. we would also be pleased to assist you in this aspect, to help you meet your objective.

1. Vesting Schedule I : Incremental Vesting

Length of Service Return of Investment (%)
Less than 3 years 0%
Between 3 years to 5 years 25%
Between 5 years to 7 years 50%
Between 7 years to 10 years 75%
10 years or more 100%

2. Vesting Schedule II : Flat Vesting

Length of Service Return of Investment (%)
Less than 5 years 0%
5 years or more 100%


Based on the agreed Vesting Schedule and upon fulfilling all terms and conditions set forth by the agreement between the Employee and the Employer, the Employee/ Employee’s next of kin will receive amounts equivalent to the vesting percentage upon :

 Resignation
 Retirement
 Disablement
 Death


TERM AND CONDITIONS FOR EMPLOYER’S CONTRIBUTION

1) Specified Fund

a) This employee Incentive Scheme (“Scheme”) will invest in a selected fund managed by Public Mutual Berhad (“Public Mutual”)


2) Eligibility

a) This scheme is open to an Organization or Employer with a minimum of 10 participants, and a minimum group Initial Investment of RM10,000 (Minimum of RM1,000 per account) whose ages are 18 years and above on the date of application.


3) Master Account

a) A minimum investment of RM1,000 is required to open a “Master Account” under this scheme

b) A “Master Account” is an account for any fund managed by Public Mutual Berhad under the Employer’s/ Organization’s name


4) Initial Investment (II) and Additional Investment (AI)

a) The Employer and each Employee participating in this Scheme are required to complete the Fund Application Form.

b) A Joint Account will be opened for the Employer and each participating Employee. The Employer shall be the First Unit Holder and the Employee shall be the Joint Holder

c) The Employer, as the First Holder, may elect for Sole Authority to authorize transactions for the Joint Account. (Election to be indicated in the Fund Application Form).

d) The minimum amounts for Initial Investment and Additional Investment are as follows :

 Initial Investment per account (minimum) : RM1,000
 Additional Investment per account (minimum) : RM100

The details as per Appendix I and II are required

Note :
Appendix I : List of names and Employee details for Initial Investment
Appendix II : List of names and Employee details for Additional
Investment


5) Making Investment

a) The Employer shall contribute an agreed amount to each of the Employee’s Investment Account

b) A cheque for the investment amount must be made to “Public Mutual Berhad” together with :

 A list of the Employees’ names
 Account numbers (if applicable)
 Amount to be credited into the Account held jointly with the Employee (Joint Account)

c) All bank charges i.e. commission on outstation cheques shall be borne by the Employer.


6) Crediting of Units

a) Units will be credited to the respective Joint Account upon receipt of the cheque


7) Reporting

a) The employer will receive a master list of transactions and statements of account


8) Distribution

a) Distribution, if any, must be reinvested. Public Mutual will automatically reinvested the distribution within 15 days after the fund’s financial year or as provided for in the trust deed

b) Distribution reinvestment is based on the manager’s buying price


c) The distribution of income is expressed in sen per unit


9) Taxation

a) The Employer/ Organization will only declare the taxable income as stated in the tax voucher and claim any tax credit attached to it.


10) Repurchase/ Redemption of Units

a) Repurchase or Redemption of units, whether partial or full, may be made by the Employer Only

b) To make a repurchase, the Employer is required to complete a Repurchase Form

However, Public Mutual shall not be bound to comply with any request for Partial Repurchase if the repurchase would result the account holding less than 1,000 units

c) All payments for repurchased units will be made in the name of the Employer


11) Right to Reject Future Investment

a) Public Mutual has the right to accept or reject all future investment if an account has been closed


12) Death/ Disablement/ Resignation/ Retirement of Employee

a) Option I : Redeem the units in the Joint Account held with the relevant Employee

The Employer may redeem all the accumulated units in the Joint Account held with the relevant Employee and thereafter hand the proceeds to the Employee/ Legal beneficiary of the deceased Employee, according to the Vesting Schedule of their agreement/ contract

b) Option II : Transfer the units from the Joint Account held with the relevant Employee to the Master Account

The Employer may transfer the affected account to the Master Account. The Employer will have to execute the Transfer Form and pay a nominal fee of RM25 per transfer


13) Transfer/ Switching of Units

a) Transfer of Units

i) Transfer of units is allowed at anytime to any named party as per Employer’s request

ii) Every request of transfer of units must be made on the prescribe Transfer Form together with a payment of RM25.

iii) The minimum units per transfer is RM1,000 units

iv) Public Mutual may decline to register any partial transfer would result in the account having less than 1,000 units

v) Any Employer/ Organization with less than 1,000 units and wishes to transfer units will be required to transfer all the units

b) Switching of Units

i) Switching fees are waived for this scheme. Switching of fund will based on the manager’s buying price at the end of the day switching is made


14) Purchase of Optional Insurance is Allowed

a) As Public Mutual unit holders, the Employer as the First Holder is qualified to purchase for its Employees, Term Life Insurance, Hospital and Surgical, PA and other Insurance Product underwritten by Public Mutual by Public Mutual’s panel of insurance companies at specified rates

b) The Employees, as Joint Holder may also individually purchase the said insurance policies


15) Loan Schemes/ Pledge Collateral

a) All investment accounts under this Scheme are not allowed to participate in any loan scheme/ pledge collateral


16) Guidelines on Role of Employer

a) The employer is required to :

i) Pass a resolution in the board meeting and submit the relevant documents for opening a Master Account such as the Memorandum and Articles of Association (M& A), Form 49 and etc.

ii) Provide the a list of the authorized signatory Form 49 : and the sties

iii) Enter into transactions with authorized personal/ agent of Public Mutual

iv) Liaise with Public Mutual’s Customer Administration Department on statements of accounts, repurchase requests and etc.

v) Notify Public Mutual one month in advance should they wish to terminate this Scheme

vi) Notify Public Mutual of any changes to Unit Holder(s) particulars in writing within One Month of the occurrence



Thank you.

Regards




Ahmad Najib Bin Ahmad
013.510.9432
najib0518@gmail.com

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