EPF under siege and the silence of politicians

For decades, the Employees Provident Fund (EPF) had been a sacred cow, zealously defended by Malaysians against political machinations. Any politician who even dared to openly entertain the idea of utilising EPF funds in ways that went against the interests of its contributors risked facing painful retribution at the ballot box.

These days however, we have seen the hallowed stature of the EPF reduced to that of nothing more than a common ATM machine. Today, politicians like Asyraf Wajdi, Ahmad Zahid Hamidi and Najib Razak think nothing of badgering the EPF to allow contributors to withdraw every single sen from what was supposed to be their old age savings. These politicians even openly cajole others to join in their cause, and do so with impunity.

What is sad is that only a few public figures and a handful of trade union leaders have dared to openly defend the sanctity of EPF funds. Doubly tragic is the deafening silence among the opposition. It may very well be that during this pandemic situation, it was not just the Covid-19 virus that spread, but also pusillanimity among MPs.

The EPF was set up in 1951 to help the Malaysian workforce save for their retirement. It is currently the fourth largest pension fund in Asia, and 12th in the world. As a retirement fund, the EPF was incorporated to help Malaysians save up for their golden years.

But the reality is that the EPF is sitting on an asset pile. Its investment assets as of December 2020 stood at over RM1.06 trillion. Every month, employers and employees make statutory contributions to the fund to the tune of tens of millions or more. Given the sheer size of its funds, the temptation to dip into the EPF kitty is indeed alluring.

Over the decades, the EPF’s massive funds have been the target of various parties, some with benevolent motivations and others with questionable motives. We have seen multiple attempts to use EPF funds to bail out politically connected corporations, including government-linked companies.

Some of these attempts were successful, others were staved off. But the opposition voice towards such moves were always vociferous in preserving the sanctity of the funds, and to uphold the overall interests of its 1.6 million contributors, not merely for the expediency of some.

But opposition to the latest campaign to allow contributors to make more withdrawals from their Account 1 (as they did before under the i-Citra scheme early this year) has been rather muted. The likes of Asyraf, Najib and Zahid are singing the same old tune, this time exploiting the recent floods as the reason for their supporters to withdraw every single sen of their old age savings.

Whatever happened to the defenders of the EPF? Surely the economically inclined MPs who spoke up against complex financial abuses in the past can see how allowing more EPF withdrawals is detrimental to its contributors in the long run.

Does their silence mean that every time there is a weather calamity or the riverbanks burst, we can all expect the EPF to open its cash till? Are we prepared to see contributors emptying their retirement savings? Ever since the EPF introduced the i-Lestari, i-Sinar and i-Citra schemes over the past two years to help tide over contributors during the pandemic, many have seen their savings severely depleted.

Going by the EPF’s estimate, people would need at least RM240,000 in their savings if they were to spend an average of RM1,000 per month for 20 years after retirement. And RM1,000 a month is paltry even by today’s standards, not to mention the inflation over the coming years. The shocking data revealed by the EPF shows that 67% of its contributors do not even have that amount in their savings! How are they to survive their retirement if we allow contributors to withdraw more funds from their savings today?

The integrity and sanctity of the EPF should not be sacrificed on the altar of populism. If we choose to be reckless with the EPF and the retirement savings of Malaysians now, it will inflict damage that cannot be undone.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.