PETALING JAYA: The Malaysian Trades Union Congress (MTUC) has criticised Putrajaya’s decision to allow Employees’ Provident Fund (EPF) contributors to withdraw RM500 a month until December, saying it is not the right thing to do.
Such a move, MTUC secretary-general J Solomon said, will result in the loss of annual and compounded dividends in the long term, and deplete an employee’s long-term savings.
Solomon said the government is resorting to asking workers to take money out of their own provident funds meant for old-age savings and spend it at a time when it should inject funds to help those affected by the Covid-19 pandemic.
In other words, he said, it is using the workers’ savings to pump in RM50 billion for the next nine months.
“This is not a morally right thing to do.
“It is a case of having to ‘rob’ from one’s own savings, arising from the failure of the government to protect its people,” he said in a statement.
Earlier today, the government announced that some 12 million Malaysians will be allowed to withdraw RM500 monthly from their EPF Account 2 for the next one year, as part of measures to help the public cope with the financial impact of the Covid-19 restrictions.
The government said it expects total withdrawals of about RM40 billion.
Solomon, however, said the government should instead use its reserve funds to provide interest-free loans of at least RM5,000 each to help EPF members to sustain themselves and their families during the crisis.
He said contributors should be allowed to start repaying through salary deductions once the situation returns to normal.
“The government should have the moral courage to dig into its reserves to pump in this money directly into the pockets of workers without having to compromise their old-age savings,” he said.
He said most members use their Account 2 to reduce their housing loan repayment to save on their interests. Others also depend on it for their tertiary education and medical needs.
“To ask them to take out their own savings at a time like this is adding salt to an injury,” he said, and urged to government to reconsider the move.