MP: Government total U-turn on EPF Act!

MP objects to extension of full EPF withdrawal from age 55 to age 60.

TAWAU - The Federal government has been told to keep its promise earlier, that that there would be no change to the current policy for the full withdrawal of the Employees Provident Fund (EPF) savings by contributors at age 55, even with the proposed extension of the minimum retirement age at 60.

Urging this was MP for Tawau Datuk Chua Soon Bui, reminding that the Human Resources Minister Datuk Seri S. Subramaniam had promised this in his reply in Parliament, recently.

She reminded this after the debate on the Minimum Retirement Age Bill 2012 in the parliament on 27June, which she also took part in it.

She noted that many EPF contributors had expressed their grave concerns over the recent announcement by the Deputy Human Resources Minister, Dato' Lim Siang Chai, that the Government is considering to amend the EPF Act 1991 to raise age for partial withdrawal by EPF contributors to 55 years, and full withdrawal to 60 years.

“Why is the government doing another U-turn and not fulfilling what it had promised in the Parliament, earlier?” she questioned.

Chua further noted that currently, the major concern of the 12 millions EPF contributors in the country are, the loan of 60 % or  RM144.5 billions out of the total of RM440 billions of the EPF money to the governments agencies.

Citing the Government’s past track records of the manner it utilized the EPF money to bail out of various ailing government-linked companies (GLCs) like Malaysia Airlines (MAS) and the Putra Light Rail Transit which belongs to Renong, she said it was only natural that the contributors are now skeptical and concerned of whatever moves the Government have in mind on EPF funds.

She said some people had suspected that the proposed extension of partial withdrawal of EPF savings by EPF contributors to 55 years, and full withdrawal to 60 years, 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 ‘manuveur’ 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.

She stressed that the contributors have the right to know what are the 60% of the EPF borrowed by government GLC and agencies utilized for, including the recent announced RM1.5 billion for housings scheme in federal territory, and RM 1 billion for MAS, whether such borrowing come with surety for short term or long term return for EPF.

Chua went on to note that the feedback which she gathered thus far had indicated that most EPF contributors wanted their EPF withdrawal to be maintained at age 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) also 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 suggested.

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.