Worker confidence in the competence, professionalism, accountability,
transparency and integrity of the EPF in the management of their funds
had suffered unprecedented attacks by a whole catalogue of recent
EPF scandals and fiascos, to the extent that never have so
many EPF contributors been so concerned about the safety and quality of
their retirement savings, such as:
The fiasco of the unlawful 2% cut of employees’ EPF contribution has highlighted the need for major amendments to the EPF Act 1991 to ensure that the RM185 billion EPF funds are directly accountable to the 9.7 million EPF contributors and not just to the Finance Minister so that they will not suffer in any political battle between the Finance Minister and Prime Minister.
This is what happened over the 2% cut of employees’ EPF contribution announced by the Prime Minister in the RM3 billion economic stimulus package as a counter to the US economic slowdown.
Although the Prime Minister had announced on March 27, 2001 that the two per cent EPF cut would be effective from April 1, 2001, in an act of insurbodination and challenge, the Finance Minister, Tun Daim Zainuddin did not sign and gazette the Ministerial order for the variation of the Third Schedule of the EPF Act 1991 on the minimum statutory rate for workers’ contribution before March 31 for it to come into force on April 1, 2001.
The contretemps over the failure or refusal of Daim to sign and gazette the Ministerial order over the 2% cut in employees’ EPF contribution cannot be the cause but merely the symptom of the Mahathir-Daim showdown, resulting in the bizarre “leave” of Daim as Finance Minister for two months from the Cabinet.
Daim is playing a losing hand in the stand-off with Mahathir and he is sending out messages of reconciliation, and he signed the Ministerial order for the 2% EPF cut at the end of last week but as today, it has not yet been gazetted.
The law is very clear that the Finance Minister’s order to vary the minimum statutory rate of contribution can only come into effect when it has been gazetted, and as there is no provision for the Minister to make any variation with retrospective effect, this would mean that the 2% EPF cut can only come into effect from June 1, 2001 as the gazette can only be published after May 1, 2001.
This episode should be an eye-opener as to why it is imperative that all workers should make a single-minded May Day 2001 Resolution to demand amendments to the EPF Act to make ensure that the EPF funds, which would touch RM200 billion by the end of the year, are directly accountable to the 9.7 million EPF contributors and not to one man - be he the Finance Minister or Prime Minister.