Rumours are rife that the government's bid to extend the the age limit for the full withdrawal of EPF savings is part of the regime’s ploy to 'manoeuvre' the funds for the general election.
KOTA KINABALU: The federal government has been told to keep its promise that there will be no change to the current policy for the full withdrawal of the Employees Provident Fund (EPF) savings by contributors even with the proposed extension of the minimum retirement age to 60.
Tawau MP Chua Soon Bui reminded that Human Resources Minister S Subramaniam had made this promise in his reply in Parliament after the debate on the Minimum Retirement Age Bill 2012 on June 27, which she also took part in.
Chua noted that many EPF contributors had expressed their grave concerns over the recent announcement by Deputy Human Resources Minister Donald Lim Siang Chai that the government is considering amending the EPF Act 1991 to raise the age for partial withdrawal by EPF contributors to 55, and full withdrawal to 60.
“Why is the government doing another ‘U-turn’ and not fulfilling what it had promised in Parliament earlier?” she asked.
Chua also said that currently, the major concern of the 12 million EPF contributors in the country is the RM144.5 billion (of RM440 billion) in loans given to government agencies.
Citing the government’s past track records of how it utilised the EPF money to bail out ailing government-linked companies (GLCs) like Malaysia Airlines (MAS) and the Putra Light Rail Transit which belonged to Renong, she said it was only natural that the contributors are now sceptical of whatever moves the government had in mind on EPF funds.
She said some people suspected that the proposed extension of the partial withdrawal of EPF savings to 55 years, and full withdrawal to 60, is part of the present regime’s ploy to “lock up” the funds for another five years.
This is so that there would be sufficient time and room for the present regime to “manoeuvre” the funds to its full advantage, including to fund the coming 13th general election.
She reiterated that the Barisan Nasional-led government must stop treating the EPF as its “piggy bank” by citing public interest.
Offer pension schemes
Chua also stressed that the contributors have the right to know what the loans disbursed to the government GLCs and agencies were utilised for.
“And this includes the recent RM1.5 billion for housing scheme in the Federal Territory, and RM1 billion for MAS, whether such borrowings come with surety for short- or long-term return for EPF,” she said.
Chua noted that the feedback which she gathered thus far had indicated that most EPF contributors wanted their EPF withdrawal to be maintained at 55, while others have been given options to leave their savings partially with EPF.
She said many people have opted for full withdrawal at 55, to use it for their children’s education, to venture into business, or to spend on their interests or hobbies.
Chua, who is also a vice-president of Sabah Progressive Party (SAPP), suggested that the EPF should provide more options of retirement and pension schemes, for both public and private sectors.
“The options may include total withdrawal of EPF at age 55, or progressive withdrawal from age 55, which is a popular practice in Singapore and Hong Kong. Lump sum withdrawal should also be given in case of emergency, and not necessary limited to what is stipulated now,” she said.
She contended that the government should not assume that the people or the EPF contributors do not have the knowledge in managing their pensions.
“They only need to be given a choice of various pension planning schemes and they will be able to plan their retirement more effectively when the minimum age of retirement is extended to 60,” she said.