Employers and employees groups want changes to address EPF worry

PETALING JAYA: Employers and employees groups want changes to be made to address the worrying number of Employees Provident Fund (EPF) contributors' having insufficient savings for retirement.
EPF Head of Strategy Management Department Balqai Yusoff had, on May 15, said that only 22% of the 6.7 million active contributors have sufficient savings of RM196,800 or more to sustain themselves during retirement.
Among others, experts have urged the government to increase employers and employees minimum EPF contribution, for EPF withdrawals to be made solely for retirement, and that the private sector enjoy the same benefit as the public counterpart.
Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said there have been too many cases of EPF funds being withdrawn before retirement for other purposes, like the purchasing of houses.
He said the government should review the current system, and must not allow funds to be withdrawn, other than for the purpose of retirement.
Under the current system, 30% of contributors' savings go to Account 2, which allows for withdrawal before the retirement age for purposes such as house purchase.
"I think the government can provide various schemes for the purchase of house and others," he told theSun when contacted today.
Congress of Unions of Employees in the Public and Civil Services president Datuk Azih Muda wants the government to review the existing employers' contribution rate of 13% to 15%, and for employees' contribution to be increased from the current 11% rate.
"The current rate too low. Especially those with low income, what can they save?" he said.
Azih said EPF should also emulate other savings fund, like Amanah Saham Bumiputra (ASB), which provides higher returns and dividend rates of about 10%, adding that salaries should be reviewed every three years, compared to the current five, due to the increasing consumer price index,
Meanwhile, Malaysian Trades Union Congress secretary-general N. Gopal Kishnam said the government should design a policy to be more consistent in providing pension funds to retirees, to address issues of those having insufficient savings after retirement.
He said the current practise of pensions being given solely to the public sector was not fair, as those from the private sector equally contributed to the country's income.
"Government shouldn't have double standard. It should extend the policy of providing pensions to the private sector as well. We hope Prime Minister Datuk Seri Najib Abdul Razak will address this issue as soon as possible," he said.