The Employees Provident Fund board has given the fund's management two months to resolve the controversy surrounding changes to the fund's death and disability benefits.

Also to be resolved is a proposal that EPF manage an optional annuity scheme, instead of handing it back to the six private insurance companies that had were originally appointed to run it.

According to the Malaysian Trades Union Congress which had brought up both issues, the changes to the death and disability benefits are a more critical concern compared with the annuity scheme.

The former involves statutory amendments and reduces existing benefits for workers whereas the latter scheme is only an option, union leaders say.

The congress claimed that it was not consulted for decisions made in both issues.

MTUC president Zainal Rampak said the workers' representatives on the EPF board had reiterated their demand at an EPF board meeting yesterday that the original death and disability benefits be restored.

"The response (from the management) will be reported to the board for consideration and a decision when it meets again," Zainal told malaysiakini today.

The controversy ignited when the Finance Ministry announced last year that the EPF death and disability benefits would be reduced to a flat rate of RM2,000 from the a previous sliding scale ranging from RM30,000 to RM1,000.

The congress then proposed a nationwide picket in May to demand for the return of the benefits as well as the suspension of the controversial pension scheme plus a host of other grievances.

The picket was put off when Prime Minister Dr Mahathir Mohamad promised that the death and disability benefits decision would be reviewed and the annuity scheme suspended pending a study by consultants.

According to the congress, the optional privately-run annuity scheme would benefit the insurance companies more than the contributors.

Detailed discussions

Yesterday, MTUC said the fund's board deliberated on the revised rate for death and disability benefits and also agreed to discuss and identify models for an EPF-managed pension scheme.

However, the board is reported to have failed to come to a final decision regarding the benefits as well as the pension scheme.

EPF chairperson Abdul Halim Ali was quoted as saying that the board decided to put it off for two months to allow for detailed discussions on the proposal that the pension scheme be handled by EPF.

Zainal said it had been a difficult task for the five workers' representatives to convince the eight-member board on MTUC's proposals as the other three members were representatives from the employer's federation, the civil service and the fund itself.