MTUC questions EPFs 5 percent dividend, lowest in 25 years
The Malaysian Trades Union Congress (MTUC) wants the Employees Provident Fund to explain the five percent dividend expected to be declared for the year 2001, the lowest ever in 25 years.
The New Straits Times yesterday quoted sources saying that the EPF Board had decided three weeks ago on the five percent dividend.
Sources were also quoted as saying the recommendation has been forwarded to the finance minister for approval.
MTUC secretary-general G Rajasekaran today questioned the further decline in the rate following the downtrend over the last 10 years.
"What is the reason for the continuing decline? As it is, the six percent dividend declared for 2000 had upset a lot of contributors.
"We want a proper explanation from the EPF. If their reason is unfavourable market trend, then I don't see how other funds like the Armed Forces Superannuation Fund (LTAT) can consistently declare a dividend of more than 10 percent, even 13.5 percent at one time," he said when contacted.
Rajasekaran said for 2001, the LTAT had declared a 10 percent dividend, including a three percent bonus.
"How is it that they are able to get really good returns on their investments and the EPF cannot?"
Serious impact
He stressed the importance of EPF's dividend rate to the 10 million contributors because it addresses the inflationary trend over the years pending retirement age.
"It has a serious impact to contributors upon retirement and cannot be dismissed as an economic problem.
"The other question is how much of EPF investments was used to rescue fledgling companies, like TimeDot.com, instead of increasing earnings for contributors," Rajasekaran added.
Meanwhile Tabung Haji, with 4.25 million contributors, had reportedly declared in early February a 3.25 percent dividend for last year, the lowest since 1967. However, it managed a 5.5 percent rate for the previous year.
The highest dividend rate declared by the EPF, which has a total fund size of about RM186 billion, was 8.5 percent between 1983 and 1987.
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