(Petaling Jaya, Tuesday): The announcement of a 6% dividend by the Employees Provident Fund last year - the lowest declared by the EPF since 1975 - has come as a shock to the nine million EPF contributors as it came a week after the Finance Minister Tun Daim Zainuddin had said that Malaysia was expected to show a growth in gross domestic product (GDP) of more than 8% for last year.
The EPF contributors are entitled to a full explanation as to why its 6% dividend last year was lowest, not only in the past 25 years, but in the past four years when the GDP growth was the highest last year since the Asian financial crisis in 1997. With lower GDP growth, EPF could still declare a dividend of 6.74% in 1997 and 1998 and 6.84% in 1999. What went wrong last year?
EPF Chairman, Tan Sri Abdul Halim Ali said that the lower dividend last year as compared to 1999 is because of an expanded membership base and a slightly higher provision for unrealised losses in the equity portfolio.
Ali should explain how an expanded membership base has led to a lower dividend. Even more important, EPF contributors want to know the reasons for the higher losses from the EPF investments, in particular the RM1 billion losses reportedly incurred by EPF as a result of the shares of a finance group which was bought by EPF at a very high price in 1996.
The standards of EPF accoutability and transparency especially with regard to its investments leave very much to be desired, and DAP calls on the EPF Board to set an example good corporate governance by establishing a mechanism whereby the EPF could be accountable to the 9 million EPF members with regard to its investment policy and decisions.
The EPF should convene a general meeting of EPF contributors
in every state in the country to explain the reasons for the lowest EPF
dividend in 25 years, its investment policy and decisions where EPF
Board members and officials
can allay the concerns of EPF contributors about the safety, liquidity and yield of EPF funds as well as address the queries of EPF members.