updated version

The Malaysian Trades Union Congress (MTUC) will meet with a consultant representing the Employees Provident Fund (EPF) and affected insurance companies next Thursday, to discuss the controversial annuity scheme.

MTUC president Zainal Rampak today explained that this was a follow-up from Prime Minister Dr Mahathir Mohamad's letter to the Congress on May 9, resulting in MTUC deferring a planned nation-wide picket to three months.

The picket that had been scheduled for May 12 aimed to register complaints of union members regarding EPF's alleged bad management of the fund.

Following this, many calls were made by the government to dissuade MTUC from holding the picket. However, the Congress remained steadfast in its decision until it received a letter from the prime minister agreeing to look into the complaints.

Zainal, who was speaking at a press conference held at the Transport Workers Union in Petaling Jaya, said the meeting was an invitation from EPF and he did not have any information regarding the consultant.

"All I know is that the consultant would represent insurance companies selling the schemes," he said, adding that he would bring along his top office bearers to the meeting.

Memo

MTUC had objected to the privatisation of workers' retirement programme through an annuity scheme managed by private insurance companies.

This was stated in a memo handed to EPF on April 27, which also expressed MTUC's unhappiness over:

- The drastic reduction of death and incapacitation benefits from RM30,000 to RM2,000;

- The six percent dividend for last year, the lowest in 26 years;

- EPF's decision to buy 78.7 million Time dotCom shares (though the government had said no money was involved in the transaction as the sum was the unpaid portion of the company's borrowings of RM500 million from the agency in 1996);

- The reduction of employee contribution from 11 percent to nine percent for a year;

- The government's refusal to make the EPF Investment Panel accountable to the EPF board; and

- Wasteful expenditure such as the EPF headquarters in Petaling Jaya being abandoned. Fewer than 50 workers are in the huge building which once housed 2,000. The EPF is now renting premises at a cost of RM150,000 a month.

On May 9, Mahathir issued a letter stating that the government has agreed to suspend the annuity scheme, restore the death and incapacitation benefits and urge for more transparency in the EPF.

Form 17A

Meanwhile, Zainal said he was bombarded with queries in Perak and Kelantan recently regarding the EPF Form 17A, which workers must submit if they wanted their contribution reduced from 11 percent to nine percent.

He said EPF had not issued an official statement on the matter although on May 3 Human Resources Minister Fong Chan Onn had told MTUC that employers only had to submit a letter carrying signatures of those who wanted the reduction.

"The MTUC accepted this assurance and now it is up to EPF to convey the message to all employers," said Zainal.

"This procedure will not only help contributors but the government as well as it will save thousands of forms and paperwork," he added.

Asked about developments after Mahathir's letter, Zainal said he is confident that the prime minister will keep his promises.

"We are especially happy that the incapacitation benefits will be restored to RM30,000 from the flat rate of RM2,000," said Zainal.

When reminded that the benefits was a clause in the 1951 EPF Act (Amend 1999) and would therefore need to be modified in Parliament, Zainal said it was up to the finance minister.

"We'll be meeting deputy finance minister Chan Kong Choy soon to discuss this matter," he said.

When queried regarding the EPF Form 17A, Fong agreed with Zainal and said employers need only submit a block letter to EPF to specify workers who wish to reduce their contributions.