By the time a member retires, therefore, he has a considerable amount of savings, with compounded dividend, which he can withdraw to provide for his financial needs. Employers and employees are, however, allowed to elect to contribute at rates higher than the statutory rates. Many countries have a similar fund. In Malaysia, the EPF is an example of a savings scheme and the Public Service Pension scheme is an example of a pension scheme. It is interesting to note that provident funds tend to exist in former British colonies including countries in Asia such as India, Singapore and Malaysia.
Different schemes have different funding mechanisms.
Some are financed through contributions from workers and employers, while others receive contributions from the state as well. In a savings scheme like the EPF, the individual or the contributor provides for his own retirement while in a social insurance scheme, the working population help to finance the payment of pensions of current retirees. The EPF is itself a social security organisation. But different social security organisations operate on different principles, as has been explained, and cater to different societal needs. Countries differ on the availability and types of social security provided, depending on their economic status.