I am supportive of the Employment Insurance Scheme (EIS). As someone who lost his job not once or twice but three times in the last 20 years I know the pain and anguish of people who have lost their job and have nowhere to turn to in terms of financial support to get them by until the next job is found.

Those who have never lost their job or never have to worry about money will not be the correct source of feedback for this initiative.

It is wrong also to say that those on unemployment benefits will not bother to work or find work as however true that may be, this will probably limited to a few lazy so-and-sos who will never change their ways regardless. The majority of us need job/work for our personal satisfaction as well as a sense of pride and self-worth and not just only for financial gain.

However, the crux of the matter, the sticking point, the make-or-break of this idea lies in the proposal for more payment in the form of contribution to be collected and administered by the Social Security Organisation (Socso) which is total unnecessary and will just burden employees and employees even further in times of rising inflation and cost of living.

Socso recently successfully lobbied the government, against strong industry protest, to increase the monthly contribution rate as well as bring more workers under its coverage as can be read here and here.

Even before this increase Socso was collecting about RM1 billion more annually then it pays out. Refer here for details.

As at Dec 31, 2015, total past contribution unused held in either investment, money market items, bank deposits and similar item amount to in excess of RM23 billion. Refer here for details.

What on earth are they going to do with all these monies?

Keep on buying more and more buildings and change their headquarters when the previous one was just as good. Refer here for all the complications that ensued.

Or dish out more emoluments and administrative expenses as disclosed here.

I have previously advocated that Socso returns to its contributors either in the form of rebates/bonus or no-claims-bonus for those who never have made any claims in their life as a normal insurance company does.

Doomsday scenario

In conclusion, the current Socso contribution is more than sufficient to meet the potential payment of unemployment benefits. If there comes a time when the cash/investment hoarding of RM23 billion is exhausted as claimed/forewarned by Socso in 2004 or more recently in 2016, then at that point the contribution can be raised.

As the doomsday scenario as warned in 2004, which was almost 13 years ago, never came to pass, I am confident the 2016 warning would also be a false alarm.

All monies held by Socso are directly attributed to contributors. If excess collection in the past is invested and is generating sizeable returns, these returns also belong to contributors and should be used for contributors’ benefits in one form or another. Those are not ‘harta karun’ to be used for any other purpose apart from contributors benefits.

This is how the Employees Provident Fund (EPF) operates, all contribution and earnings after administrative and management cost are channelled back to contributors.