COMMENT | Socso planning rates hike due to poor management?
COMMENT | Human Resources Minister M Saravanan has announced that they are studying the need to raise the mandatory Social Security Organisation (Socso) contributions by RM1 or RM2, claiming that it will not burden the people.
The contribution rate had never been raised since 1971, the year the agency was established, adding that his ministry found the demand for contributions had increased from all job sectors, including from the informal sector.
From 1971 until today, total contributions have risen by over 100 percent, "but we have never raised the rate".
Wein Nube find this reason flabbergasting as this is precisely one of the reasons why it should not be raised - that is because the number of contributors is increasing annually. Even foreign workers are contributing now.
Based on the past records of Socso funds and the total monthly contributions coming into the fund, the Nube finds that Socso has not managed its funds prudently.
There is a need for a special committee of inquiry...
COMMENT | Human Resources Minister M Saravanan has announced that they are studying the need to raise the mandatory Social Security Organisation (Socso) contributions by RM1 or RM2, claiming that it will not burden the people.
The contribution rate had never been raised since 1971, the year the agency was established, adding that his ministry found the demand for contributions had increased from all job sectors, including from the informal sector.
From 1971 until today, total contributions have risen by over 100 percent, "but we have never raised the rate".
We in Nube find this reason flabbergasting as this is precisely one of the reasons why it should not be raised - that is because the number of contributors is increasing annually. Even foreign workers are contributing now.
Based on the past records of Socso funds and the total monthly contributions coming into the fund, the Nube finds that Socso has not managed its funds prudently.
There is a need for a special committee of inquiry into the management of Socso funds to ensure accountability and transparency on how the workers’ monies are spent.
Poor investments, unnecessary expenses and blindly diving into expensive projects using Socso funds are the major issues in the poor management of Socso, which needs to be investigated by the government.
The main funds are largely derived from the monthly contributions by local and migrant workers and employers. These funds are meant to help the insured workers and their families against the contingencies of invalidity and employment injury in their crucial time of need.
We have heard horror stories of how some of the insured are pushed around or made to feel that they are not being honest when they apply for what is rightfully theirs.
They have to go through so many layers of checks and many a time they end up dejected because their applications are rejected unfairly. Some of them had to go to the courts to seek justice, even if only for a few hundred ringgit a month.
Some of these contributors are not treated with dignity when they apply for the claims and the assessments are also not done fairly. At times, the insured are given less than five minutes by the panel doctors to assess their invalidity.
Doubtful investments
On the other hand, we see millions of ringgit being wasted on mindless projects that can either wait or we can do without.
This is absurd as it appears that the minister and his officers in Socso have no sense of empathy towards the contributors. There does not seem to be any accountability.
The latest move to spend RM500 million of Socso funds on a rehabilitation centre is one example of how callous it is in managing poor workers’ contributions when it should be investing in ventures that give good returns.
Going by past experiences, the projected cost would rise by about 20-30 percent by the time the centre is completed - as was the case with a similar centre in Malacca, where the initial projected cost of about RM200 million ballooned to more than RM275 million by the time it was completed in 2014.
Socso is already having to spend around RM75 million annually to maintain and operate the Malacca centre. On a related matter, Socso withdrew its revised qualifying criteria for dialysis aid only after a public outcry.
Yes, we need a rehabilitation centre but as we have always emphasised, this project should be funded with federal government funds so as not to bleed Socso. After it becomes operational, the amount spent for its upkeep annually will run into hundreds of millions of ringgit.
Besides these ventures, Socso has invested in prime land parcels in the middle of Kuala Lumpur city, which are now lying idle and with no returns. Not only this, but it has to continue paying the respective taxes under the law.
The previous Auditor-General’s Report had already pointed to the financial mismanagement in Socso, with millions being spent that cannot be explained. And Socso has also been spending millions on new projects for its IT systems.
The sustainability of Socso’s funds has been affected by unnecessary direct spending, ill-conceived investment decisions that have led to losses for the fund and expenditure on items with little or no returns.
Nube urges Saravanan to come to the ground to understand how the people are coping in this pandemic, instead of making announcements from ivory towers.
J SOLOMON is the general secretary of the National Union of the Bank Employees (Nube).
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
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