Call on MTUC and CUEPACS to thrash out their differences and come out with a unified stand on EPF as the total disarray of trade union leaders is the greatest disservice to the 10.3 million EPF contributors and the cause for greater EPF accountability, transparency, quality and security of RM203 billion EPF funds
by Lim Kit Siang
(Petaling Jaya, Thursday): MTUC and CUEPACS should thrash out their differences and come out with a unified stand on Employees Provident Fund (EPF) policy and directions as the total disarray of trade union leaders is the greatest disservice to the 10.3 million EPF contributors and the casue for greater EPF accountability, transparency, quality and security of RM203 billion EPF funds.
The picketing outside the EPF offices in various cities yesterday to protest against the lowest EPF dividend in 40 years of 4.25 per cent for last year was supposed to be the high-point of the protest by the 10.3 million EPF contributors against the lack of efficiency, accountability, transparency and good governance of the EPF, but the message was quite garbled because of the contradictory and confusing stances of trade union leaders.
Firstly, there is the public dispute between MTUC and CUEPACS, with their separate representation on the EPF Board, over the picketing, with the CUEPACS President Datuk N. Siva Subramaniam altering his earlier stand to express public support for the 4.25 per cent dividend declared by EPF last year.
Deputy Prime Minister, Datuk Seri Abdullah Ahmad Badawi was being most unfair when he criticised the MTUC yesterday for staging the pickets, saying that MTUC “should not resort to such drastic action on a day when we are introducing this new economic stimulus package” (The Star) – as the date for the unveiling of the repeatedly-delayed RM7.3 billion economic stimulus package was made well after the MTUC had announced its picketing plan more than a month ago. If anyone caused a clash of events, it was the government and not MTUC.
Secondly, one of the key demands of the MTUC protest memorandum yesterday was the increase of EPF contributions by employers from 12 per cent to 17.5 per cent and by workers from 11 per cent to 13 per cent – coming on the same day as the release of the economic stimulus package by the Prime Minister, which reduced employees’ contribution to EPF from 11% to 9% for a year from June 1. Furthermore, the two per cent reduction in employees’ EPF contribution was immediately welcomed by Siva as “another tried and tested method method to push up consumer spending…or the money would remain in the EPF”, forgetting that a similar two per cent EPF cut for employees’ contribution in the first economic stimulus package in March 2001 was a big flop!
Thirdly, the sorry spectacle of the five workers’ representatives on the EPF Board talking at cross-purposes at the highest governing council of the EPF, as reflected by the contradictory positions taken by Zainal Rampak and Siva, whether on the lowest dividend in 40 years or the two per cent reduction in employees’ contribution to the EPF.
Fourthly, the most contradictory and confusing stance of Zainal Rampak on the EPF imbroglio. After leading the MTUC picketing against the lowest dividend in 40 years, is he going back to the EPF Board to enjoy all the perks of EPF Board membership, only to wait for another year before leading another MTUC public protest for the lowest EPF dividend in 44 years when it dips below 4 per cent – and again after absenting himself from the most important Board meeting of the year deciding on the dividend? Shouldn’t Zainal be spelling out his position on the EPF, including whether it is compatible with his continued membership on the EPF Board?
The statement by Zainal yesterday that the EPF had suffered RM15 billion paper losses in recent years due to imprudent investments (Malaysiakini) must be taken seriously by all Malaysians, including the Cabinet and Parliament – as this is the first statement from a member of the EPF, whether Board, Investment Panel or management, publicly admitting the astronomical range of the “paper losses from imprudent EPF investments”, which had to be paid with the hard-earned cash from the live-savings of the EPF contributors in terms of the sharp fall in the annual EPF dividends.
The EPF dividend last year should have been at least 5.43% if not for the high provision of RM2.14 billion for paper losses in equity last year.
For the past five years, the annual EPF dividend had to suffer because of the huge provision for “paper losses” in equity and doubtful debts, viz: RM435 million in 1998, RM618 million in 1999, RM754 million in 2000, RM1,141 million 2001 and RM2.14 billion last year, an astronomical total of RM5.09 billion.
However, if Zainal, a member of the EPF Board, is right that the EPF had a total of RM15 billion “paper losses” to write off, this would mean that the EPF dividend for the next four to five years would be very glum and gloomy affairs, having to provide for at least RM2 billion “paper losses” every year for the next five years to clear the balance of some RM10 billion “paper losses” which are still outstanding.
EPF contributors are entitled to know the exact total of the RM15 billion of “paper losses” in equity and doubtful debts in the books of EPF, how they were accumulated, how they are to be completely written off and their effect on the EPF dividends in the coming years – and why no disciplinary action had ever been taken against any EPF official for such colossal losses in the region of RM15 billion!
However, so long as the trade union representatives on the EPF Board and outside are in total disarray and at daggers-drawn at each other, without an united stand on EPF policy and directions, there is no hope or chance whatsoever that the EPF and government would respond to the legitimate demands for EPF accountability, transparency, efficient and competent management and good corporate governance.
* Lim Kit Siang, DAP National Chairman