Fwd: EPF in more trouble?

[Kptan]

> ...lately, indications are that the ruling coalition is preparing for
> the worst because you see a lot of father x'mas projects, i.e. dishing
> out of money to all & sundry...it's like HK before handover to China,
> i.e. British carry out all sorts of projects to move money out...
>
> ...writer of this article says legally we can't do much which...okay,
> agreed...but we can have our say in the next GE because I am quite
> sure EPF membership numbers is not small...
>
> No, minister, please
> By Tony Pereira | February 7,2012
>
> I was half-asleep as the front-page headline of The Sun stared back
> at me. In disbelief I read that funds from the Employees Provident
> Fund (EPF) - RM 1.5 billion to be exact - are to be channelled to a
> foundation to provide loans to Malaysians who are not able to get a
> housing loan from a commercial bank. Not only that. The loan would be
> at a lower interest rate than that offered by a bank. The report
> quoted Federal Territories and Well-Being Minister Datuk Raja Nong
> Chik Raja Zainal Abidin as saying that these loans would be provided
> to retirees and those without steady income.
>
> Only a week earlier, I had dropped by an EPF office to get a
> statement. The friendly customer service representative who attended
> to me suggested that I may want to withdraw some of my EPF savings and
> invest it myself. At first I was confused. Why would she suggest I
> withdraw some of my savings? Now, it all clicked.
>
> Some 48 hours after I read the report of the scheme the government
> plans to introduce as soon as March 1, I am still in shock.
>
> How can the government take funds which you and I have put aside for
> our retirement and use it to fund home purchases of those without a
> steady income? I am all for helping those who are experiencing
> difficult times, but there has to be another way of doing so.
>
> In case it has escaped the notice of Raja Nong Chik and other members
> of the cabinet, the objective of the EPF is to set aside funds for
> employees who do not have any pension scheme. On retirement, the
> amount the employee and employer have contributed during the
> employees' working life is available with interest or dividends to be
> paid in a lump sum so that the employee has sufficient funds to fund
> his or her retirement.
>
> The monies belong to the members of the EPF - not the government. The
> board of the EPF has a stewardship responsibility - to act in the best
> interests of its members. I do not think this scheme is in the best
> interests of its members. Sadly, there is very little protection
> afforded to us - its members - under our laws.
>
> According to the EPF Act, its board of directors has no choice in this
> matter. Section 11 of the Act gives the minister power to give
> directions to the board. In other words, even though the funds do not
> belong to the government, the Act allows the government to decide how
> the funds which belong to the members of the EPF are invested.
>
> Section 26 of the Act sets out the investment mandate of the fund. It
> specifically states the type of investments the EPF can make. There is
> one very broad statement which says that with the approval of the
> minister, the fund can invest in "any other form of investment".
>
> This means that from a legal perspective, it is within the
> government's powers to implement the scheme which Raja Nong Chik has
> so gleefully announced.
>
> Well, as a member of the EPF, I have a few questions which I would
> like answered.
>
> If the fund is for those who are retired or do not have a steady
> income as reported, how is the borrower going to repay the loan?
>
> Secondly, since these loans are to be offered at a lower interest rate
> than that offered by commercial banks, who is going to make up the
> difference in these rates so that the members of the EPF do not lose
> out?
>
> Thirdly, who is going to fund the agency that is going to implement this scheme?
>
> Does the EPF have to pay a fee to this agency to take on this task?
> After all, the amount of administration required to disburse RM 1.5
> billion will be significant. Does the EPF have to pay a fee for this
> scheme to be implemented?
>
> Finally, how is it that such a scheme can be implemented so quickly?
> The scheme was announced at the end of January. Yet the minister
> claims that the first loans will be disbursed by March 1. Can all the
> checks and balances to ensure that the lender is protected be put in
> place within one month?
>
> I understand that those of us who can afford it have a moral
> obligation to assist those less fortunate. But let's come up with a
> scheme which does not involve taking from a fund that has invested
> carefully for its members because it is expedient to do so.
>
> My research has indicated that there are no legal avenues available to
> us - members of the EPF - to object to this poorly-thought-out and
> ill-conceived scheme.
>
> If the government is really concerned about the welfare of those in
> the low-income or no-income category, it should allocate a budget and
> be transparent about the cost of doing this. Then there would be full
> transparency to the public. At it is, by using the EPF, accountability
> is absent and the cost of this initiative is lost in the myriad of
> investments that the EPF makes for its members. Clearly there is no
> budget in the government's annual operating plan for this initiative.
> Hence the use of the EPF.
>
> So what do we do?
>
> I could go back to that friendly customer service representative who
> attended to me at one of the EPF offices and follow her advice. At
> least someone at the EPF does have its members' interests at heart.
>
> Source: http://www.thesundaily.my/news/288411
>
> * Tony Pereira is a chartered accountant and CFO of a private venture fund.