Malaysian Trade Union Congress(MTUC) speaks of a MAJOR ISSUE of concern for ALL Malaysians, not just workers.
Let us remember how the EPF scheme does not provide even now sufficient monies for oled age until death ...presently, the monies sufficient to provide the 'retiree' for only about 4 years for most...
More than two-thirds (68%) of EPF members aged 54 had less than RM50,000 in EPF savings! With the household poverty line income at RM930 monthly, RM50,000 in savings will only last 4½ years. The bottom fifth of EPF members have average savings of only RM6,909!
According to EPF, 70% of members who withdraw their funds at age 55 use up their savings less than a decade after retiring. Most EPF savings are therefore not enough to stay out of poverty after retirement.- Jomo KS is a Malaysian economist expressing his own views. - Star, 25/10/2017 Workers victims of Economic Stimulus Plan - Spend more of money - by reducing savings for old age livelihood?
The Malaysian government has in the past several times violated the sanctity of the 'private sector worker's savings for retirement and old age' to get these workers to take from these savings and spend NOW to stimulate the economy... buy more spend more now...It also created Account 1 and 2, allowing workers to take out monies to buy houses, etc ...
PENSION SCHEME for all workers is what Malaysia seriously needs > something that will ensure monthly pay-outs from a certain age('retirement age' be it 55 or 60) until death, which should really be sufficient, maybe a minimum of RM1,200(taking the Minimum Wage as a guideline) or more.
There is now a PENSION SCHEME for public sector employees - that should be the guide, which provides monthly pensions till death, thereafter a lesser pension for surviving spouse until death...and even dependent children. We need a PENSION SCHEME for every Malaysian - the UK model is something that we need to look at.
PENSION or old age security is something that must be done by the government - not 'private' insurance companies, for any private company can at any time go 'bankrupt' - but not so for the government.
There must be a 'social security' scheme or better still a FREE public healthcare system ...
COST for this kind of a 'welfare' state - normally will mean increased taxation > well, there is a serious need for review of taxation > in some countries, the 'very rich' are paying about 40-50% taxes, but in Malaysia, it is still in the low 20s.
It affects ALL in Malaysia - yes, when the number or poor and desperate people in the country increases, it certainly will affect EVERYONE. Desperate poor may lead to the increase of crime out of desperation, malnutrition and other health risks. Remember, the then BN government was inclined towards 'privatization' of even clinics, hospitals and even health-care related establishments when really healthcare should be a government responsibility > the rich can always use private hospitals...but our concern is for the majority in Malaysians who simply cannot afford the cost or fees charged by these private establishment.
During times of 'financial crisis', the government must GIVE monies, not ask its people to take out their 'old age savings' ...or reduce the rate of contributions to these savings like the EPF..
...EPF money should be for a rainy day and taking RM500 per month for 12 months will result in a loss of RM6,000 per year and those who have opted for it will lose their dividend as well as the substantial compounding interest accumulated over the years until retirement.- MTUC secretary-general J. Solomon
See earlier related post
Workers victims of Economic Stimulus Plan - Spend more of money - by reducing savings for old age livelihood?
EPF - 68% EPF members have less than RM50,000 - will last only 4 1/2 years? UMNO-BN Failure?
MTUC: Stop draining workers EPF savings to prop up economy
MTUC secretary-general J. Solomon said he was shocked to learn that EPF had approved withdrawals from 3.5 million contributors amounting to RM1.66 billion under the i-Lestari scheme.
He said EPF money should be for a rainy day and taking RM500 per month for 12 months will result in a loss of RM6,000 per year and those who have opted for it will lose their dividend as well as the substantial compounding interest accumulated over the years until retirement.
“With ample financial liquidity in the country, the government should source for funds, including obtaining soft loans from EPF to help workers, especially the 600,000 who have lost their jobs so far.
“The huge number of i-Lestari applicants shows how cash-strapped the workers are and not necessarily due to Covid-19 pandemic,” Solomon said in a statement.
Solomon said he was shocked at Deputy Finance Minister Datuk Abdul Rahim Bakri’s statement recently that the RM500 withdrawals were intended to inject RM3.3 billion into the economy monthly.
“His statement makes it patently clear that the hard earned savings of workers are being diverted and used as an instrument to prop up the economy,” he said.
The crediting of approved i-Lestari withdrawals into members’ bank accounts began on May 4 and extended till May 18.
i-Lestari is available for Malaysian citizens, permanent residents and non-Malaysians aged 55 and below that has an EPF account. The facility will allow members to take out funds only from Account 2.
Each member will be permitted to withdraw from a minimum of RM50 to a maximum of RM500 per month, and the scheme will be available from April 2020 to 31 March 2021 (12 months). - Malay Mail, 10/5/2020
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