Union chief: Persistent EPF withdrawals make bad situation worse

KUCHING, Nov 18: Persistent withdrawals from the Employees Provident Fund (EPF) coffers by the government over the past several years do not augur well for the pension fund and its contributors, asserts Sarawak Bank Employees’ Union chief executive officer Andrew Lo.

He pointed out persistent withdrawals such as reducing the rate of the employees’ contribution, allowing for various withdrawals, even for haj, has exacerbated the situation.

“Please don’t kill the patient to cure the disease. Please remember that private sector employees do not have a pension when they retire, unlike civil servants, ministers and Members of Parliament,” Lo highlighted in a statement issued here today.

He asserted that such a move was embarrassing due to the low wage policy of the government for the past 60 years.

“In most countries, people get rich before they get old. (But)…Malaysians get old before we get rich,” he added.

Lo who is also the Malaysia Trades Union Congress (MTUC) Sarawak secretary emphasised what was even more pathetic was that those who need the withdrawals most, do not even have sufficient funds in their accounts.

“According to Finance Minister Datuk Seri Tengku Zafrul Tengku Aziz, some 32 per cent of Employees Provident Fund contributors (EPF) have a balance of around RM1,000 in their Account 1. Tengku Zafrul also said 10 per cent have a balance of around RM5,000 and below in their Account 1. That means a mind boggling 42 per cent of contributors have less than RM5,000 in their Account 1 which is meant for retirement,” Lo lamented.

Lo disclosed both SBEU and MTUC Sarawak fully understand the statement by the EPF that it needs to liquidate assets to fund the withdrawals that the government imposes on it during the budget.

“According to reports, EPF will have to liquidate its assets and rebalance its portfolio to make billions of ringgit available to contributors in need of funds to lessen the financial turmoil caused by the Covid-19 pandemic, a report said.

“So, we fully understand that such withdrawals would meant that EPF would lose a great opportunity to take advantage of investing in high quality assets with low valuations,” he noted.

Lo pointed out that such a move will impact EPF’s future earnings, quality of investments, and compromise dividend pay outs.

“Most disturbing, it compromises the ability of EPF to serve it sole purpose: to provide for retirement savings of its contributors. We must not sacrifice our retirement savings for immediate gratifications,” he added. — DayakDaily