EPF should up grade its delivery system. 31/5/2007

Employment Provident Fund (EPF) is one of the oldest retirement fund in the world dating back to 1951.

On 9th May2007 the EPF board introduced some major amendments to further stream line the operation and process of the EPF. Among the factors for the amendments were that the retirement fund need to adapt to the surrounding changes, need to take into account the principles of security for the retirees and the responsibility of EPF as a trustee for the funds of the retirees. Parliament was also told that at the average age of 54 the average savings of a contributor stands at RM106,932.75 and a non active contributor it was at RM18,876.75 for the year 2005. For active contributors for males it was RM122,142.02 and for a females active contributor it was RM73,968.74.
Parliament was also told EPF has given out loans to finance mega projects of the government namely Skim Pinjaman Perumahan Kerajaan RM21.5 billion, Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) RM12.5 billion, Khazanah Nasional RM8.62 billion, Bank Pembangunan
Malaysia RM8.2 billion, KL International Airport Berhad RM5.8 billion, Bumiputera Commerce
Holding Berhad RM5.09 billion, Tenaga Nasional RM4.55 billion, Tanjung Bin Power Sendirian
Berhad, RM37.45 billion, Projek Utara Lebuh Raya Selatan RM3.29 billion, Tekad Mercu Berhad
RM2.95 billion. Totaling RM75.6 billion.
RM100 million purchase of new computers necessary?
We got information that the EPF spent over RM200million to purchase new IBM computers and soft ware in January2007. In fact we are given to understand that new computers were only bought some 3 years ago. Parliamentary Secretary to Finance Ministry Dato’ Seri Dr. Hilmi bin Yahaya who replied for the Ministry informed that some of the computers were too old having been bought in 1998 and some in 1978! Hilmi further said that the EPF only spent RM100 million to purchase the IBM computers and not RM200million informed by me. Hilmi said the EPF should look into the other complaints I have raised which are i) there was no proper open tender in the purchase of the computers ii) no arms length deal in the purchase of the computers iii) why buy new computers when only 3 years ago millions of ringgit were spent to buy computers.
With all this monies spent on the purchase of new computers one would expect that the information provided by the EPF would be the latest and up to the mark. How wrong! One Cheah Sick Khong has come to complain to us that his EPF statement which was sent to him in March 2007 only reflected 11 months contributions and not the 12 months as it should be. When he confronted the EPF officials he was told not to worry it will be corrected in due course as the January payment was in but unfortunately was not reflected in the statement sent to him. We have send a letter to EPF and have called them to correct this mistake. But to date nothing has been done. So purchase of new computers at RM 100 million has gone down the drain!




The “Call Management Center” system is not user friendly
During my speech I stated that the recent EPF’s decision to centralize the withdrawal of contributors monies for the purchase of houses and or for education is impractical and its cumbersome to the EPF applicants. All application are processed by the “Call Management Center” (CMC) operated only at Kuala Lumpur. Prior to this centralized policy all applications for withdrawals were processed at the state level. This was convenient and applicants could be easily updated of the status at the state level of their withdrawals at any time. As all the application was done on line the necessity to centralize the applications seems to be a step back wards to the whole process. Many applicants have been told by the state EPF officers that they can only collect the forms and it is up to KL to process them. So to get the latest up dates on the withdrawals one need to telephone the KL HQ which is costly as it takes time to give instant replies to the applicants. The EPF has to date not provided a toll free line for this kind of applications. This center is a typical red tape!



Unclaimed monies



Hilimi also confirmed to date i) 46,235 contributors monies totally RM119 million have not been claimed. Monies remain unclaimed mainly because contributors could have died with their close kins unaware that monies are with EPF. We urge contributors and close kins to check with the EPF and claim the monies. If an account is dormant for 7 years or more the monies would be transmitted to the “Consolidated Fund”



CBT charges for employers who failed to remit contributions to EPF?



Up to the year 1996 , 9,344 employers have failed to make contributions to the EPF. Necessary action has been taken by the EPF to recover monies from the employers. But I suggested that the EPF should also invoke the provisions of the Penal Code for Criminal Breach of Trust(CBT). As monies were deducted from the employees and not paid to the EPF is equivalent to cheating and thus one can and ought to be charged for CBT.



Dividends

As regards to the constant complain that the dividends declared by the EPF is rather very low Hilimi replied that the EPF invests nearly over 80% of its funds in secure returns thus lowering the risk of loss and consequently the income is also less. The dividends since 2002 has been increasing and it is hoped this trend will continue . Year 2002- 4.5%, 2003 - 4.5%, 2004 - 4.75%, 2005 - 5%, 2006 - 5.1%
The inflation rate was Year2002 -1.80, 2003- 1.20%, 2004- 1.40%, 2005-3.00%,2006- 3+(interim)
From the above we see that in real terms the increase of the contributors monies with EPF is negligible.

We urge the EPF to attend to its contributors needs urgently. Any delay is unfair and shows utter irresponsibility on the part of the EPF.


POSTED BY kula ON 05.31.07 @ 3:40 am | 1 Comment