(Petaling Jaya, Monday): With Friday’s decision by the Malaysian Trades Union Congress (MTUC) to reject the controversial Employees Provident Fund (EPF) annuity scheme, EPF should scrap it immediately or suspend it and come up with a better and acceptable annuity scheme within a month.
MTUC secretary-general G. Rajasekaran must be commended for his leadership to oppose the EPF annuity scheme as it is profit-oriented, managed by insurance companies and the benefits far inferior compared to EPF’s own periodic withdrawal scheme.
The statement by the EPF public affairs manager Nik Affendi Jaafar that EPF contributors wishing to withdraw from the EPF annuity scheme will have to pay a penalty is most unfair and unacceptable. The penalty for the conventional scheme is based on a declining rate whereas the Takaful charges a flat rate of RM50 for termination before the age of 55 or RM30 from ages 55 to 65.
Although some RM160 million had been taken up as single premiums from EPF funds since the launch of the annuity schemes, it would be most unfair to insist on the penalty payments for EPF contributors wishing to withdraw from the schemes as they had not been properly informed of all the pros and cons which had led to the MTUC rejection of the annuity schemes.
The EPF should therefore ensure that there is no forfeiture for any withdrawal from the EPF annuity schemes as a result of the misrepresentation of the annuity schemes by EPF and the insurance companies.
It is most shocking that although the annuity scheme had been discussed by the EPF Board since 1995 and the four workers’ representatives had taken part in its deliberations before final approval, the 540,000 MTUC members and nine million EPF contributors were never at any time consulted.
The four workers’ representatives must realise that they are on
the EPF board not because of their personal merits, but as custodians of
the interests of the nine million EPF contributors and they should devise
a system where they constantly consult the trade unions, the MTUC
and the nine million contributors for their feedback and input about
EPF operations and schemes.