“What is the effect of a nomination done at KWSP?”
Case:
DIVYYA MANCHAP v LEMBAGA KUMPULAN WANG SIMPANAN PEKERJA [2024] 5 MLRH 406
Brief Facts:
- Divyaa Manchap (“Divyaa”) brought a claim against Lembaga Kumpulan Wang Simpanan Pekerja, (“KWSP”) with regards to the distribution of her late father, Manchap a/l Suppiah’s (“Manchap”) estate.
- Manchap (“Deceased”) had two main accounts with KWSP, i.e. Account No: 10458236 (“Account 1”) and Account No: 13716036 (“Account 2”).
- KSWP had subsequently merged both of his accounts into a single account and in the process erasing Account 2, which left Manchap with only Account 1.
- Before his passing he had nominated Dharsyaini a/l Vijaya Kumar (“Dharsyaini”) to be the beneficiary of Account 2. A nominee for Account 1 was never made.
- Divya who had obtained a Letter of Administration from the High Court was the administrator of Manchap’s estate.
- Competing claims between Divyaa and Dharsyaini arose as Dharsyaini, was the nominee for Account 2 and Divyaa, is the administrator of Manchap’s estate.
- The question was who’s interest takes precedence.
THE DECISION OF HIGH COURT (HC)
- The HC held that Dharsyaini is entitled to the balance sum in Account 1 and that KWSP was entitled to exercise its administrative power merge the accounts.
- The HC was of the opinion that the nomination remains valid despite the merger of accounts as it is in accordance with the Employees Provident Fund Regulation, Employees Provident Fund Act 1991, and the Employees Provident Fund Rules 1991.
- The HC also continued to state that statutory nomination can only be cancelled or stopped under one or the circumstances expressly provided for in reg 7(1) of the Employees Provident Fund Regulations 2001 and that was not triggered in this case.
- As Machap had not made any fresh nominations for Account 1 or cancelled her name as the existing nominee, the nomination from Account 2 still stands due to the merger.
- In regards to the merging of the accounts, the Employees Provident Fund Act 1991, the Employees Provident Fund Regulations 2001, and the Employees Provident Fund Rules 1991 contain no express provisions granting KWSP the power to merge accounts but there are equally no provisions within these Act, Regulations, and Rules that prohibit such action.
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