The 10.3 million contributors to the Employees Provident Fund (EPF), the mandatory single largest pension fund for private sector workers, should hold a nationwide protest against the 40-year low dividend payout of 4.25%, the DAP said.

Its chairperson Lim Kit Siang said the EPF should have been able to declare at least 5.43% dividend for last year "if not for the high provision of RM2.14 billion for the paper losses in equity last year".

He said contributors must show their disagreement with Acting Prime Minister Abdullah Ahmad Badawi's defence of the low dividend and demand for accountability and transparency in the EPF's dealing of the RM203 billion fund.

"(Since) yesterday's declaration has cast a shadow o­n this year's May Day celebration, bringing the EPF to full account of the 10.3 million members (should be the theme)," read his statement in response to the EPF announcement yesterday.

The 4% declared in 1962 remains the lowest ever dividend payout by the EPF.

Yesterday's announcement stated that the rate was a reflection of the difficult investment climate over the last four years coupled with a lacklustre stock market.

Abdullah also defended the rate as the "best that can be given under the circumstances".

Technical explanation

Lim said EPF chairperson Abdul Halim Ali had o­nly offered a technical explanation that the higher provision of RM2.14 billion for paper losses in equity was "an additional prudent measure in line with international accounting principles".

"Contributors have a right to know why the EPF had been so imprudent as to invest in equities which had resulted in multi-billion ringgit losses dragging down the dividend."

He said they also had the right to the full list of investments o­n the equities which had gone bad, their identities, the dates, the volume and cost of investments, and the losses incurred.

Referring to his time as a member of parliament, Lim said every time he raised the "dubious investments and their losses" in the Dewan Rakyat, they were invariably dismissed by the finance minister and his subordinates as "mere paper losses" with nothing to worry about.

"Now, the chickens of these paper losses have come home to roost. Why should contributors have to pay with hard-earned cash from their life savings for what the Barisan Nasional ministers and leaders had claimed as mere paper losses?

Lim accused the EPF chair, its board members and the EPF Investment Panel of not being frank, accountable and transparent as to the total paper losses incurred.

He said the EPF Board and management had yet to deny published reports about being hit by a RM10 billion paper loss in equities and having camouflaged the losses in its accounts.

"The EPF should clarify whether these colossal losses are to be written off in the next five years and whether it would result in a further depression of dividends by more than o­ne percent every year."

Lim also questioned the timing of the announcement, saying that it was the longest delay in 50 years.

Reasons for delay

He said the EPF dividend for previous years would normally be announced in February and o­n rare occasions in March, but never in April.

"Was Abdullah waiting for Dr Mahathir Mohamad to return to his duties as finance minister before making the bad news public or had he directed the EPF Board to reconsider its decision?

"It would appear that there could be another reason for the long delay - after the Dewan Rakyat meeting so that it would not become an issue."

He also urged the cabinet to decide o­n several measures, including amending the EPF Act to allow for direct representation of contributors o­n the EPF Board and the EPF Investment Panel, and to approve the formation of an association for contributors.