The Prime Minister, Datuk Seri Dr. Mahathir Mohamad had announced the two per cent EPF reduction for employees’ contribution on March 27, 2001 in the RM3 billion economic stimulus package of "pre-emptive measures” to sustain the country's growth momentum in the face of a slowdown of the United States economy.
Two days later, Mahathir said that the 2% cut in EPF contribution for employees was compulsory under the law that it would take effect from April 1.
Mahathir is however wrong on both counts, as under the EPF Act 1991,
the 2% cut in EPF contribution for employees can only be optional and cannot
be made compulsory as Section 43 of the Act specifically provides for different
of contributions by employees at their own option.
Furthermore, any attempt to enforce the 2% minimum mandatory employees’ contribution from April 1 is illegal, null and void as the reduction has not been gazetted as required by Section 74 of the EPF Act. The reduction must first be gazetted before it could be enforced and there is no provision for retrospective reduction. This means that the two per cent cut in EPF contribution for employees can only take effect on May 1 provided it is gazetted before that date.
It is most shocking that the government and the EPF could be so slipshod in their understanding and operating the EPF law, further undermining public confidence in the competence, professionalism and integrity of EPF management and investment of the RM181 billion EPF funds belonging to the 9.7 million EPF members as their old-age savings and raising anew the whole question of EPF accountability and transparency.
The 9.7 million EPF contributors have already seen EPF losing some RM100 million from its ill-advised involvement in the Time dotCom IPO bailout.
I have still, for instance, to get a response from the EPF as to whether the RM181 billion EPF funds had been involved in the final-minutes multi-million ringgit institutional manipulation of the Kuala Lumpur stock exchange (KLSE) through the Big Three “TMT” stocks - Telekom Malaysia Bhd, Malayan Banking Bhd and Tenaga Nasional Bhd - in the past three months.
I had specifically asked EPF whether it had bought some 3.4 million shares in Maybank costing some RM43 million in the 12 days between March 9 to 27, 2001 incurring a loss of some RM10 million when the counter plunged to RM10 per share at the close of trading yesterday.
EPF contributors should turn up in large numbers to the DAP series of public forums in the country on "Buyouts and bailouts - Are EPF, Pensions Trust Fund and public monies safe?" in view of the widespread and deep-seated nation-wide concerns over the safety of EPF, Pensions Trust Fund and other public monies in the expanding list of government bail-outs and buy-outs, whether Time dotCom, MAS, Putra, Star, Indah Water Konsortium, UEM or Renong.
The forum series will start in Kuala Lumpur on Monday (9th April 2001
at 8 pm) at the Federal Hotel, KL, and an opportunity will be given
to EPF contributors to give voice to their concerns about the safety and
quality of their EPF savings by voting on five questions about the