The Employees Provident Fund (EPF) invited the Malaysian Trades Union Congress (MTUC) working committee on Feb 17, 2017 to announce the pre-decided EPF dividend of 5.7 percent for 2016.
The congress was not invited by the board to deliberate on the appropriate rate of dividend to be declared for the members for 2016.
During the briefing to the leaders of MTUC, EPF basically informed that the fixed income has increased. Income from equity market has been negative during the last three years and the depreciation of the ringgit was another negative factor.
EPF’s investment assets stood at RM684.5 billion in 2015 and in 2016 it increased to RM731 billions. The dividend declared for 2015 was 6.4 percent and it has decreased to 5.7 percent for 2016.
We welcome the increase in fixed income.
It needs to be taken note that unlike in a public quoted company, the dividend declared will not be disbursed and retained in the fund itself. Accordingly, these retained dividend proceeds too could be reinvested in fixed income market for generation of increased income.
However, due to marginal investment in equity market, the negative income growth from equity market too would be marginal which could not necessarily have an impact to declare a lesser dividend.
The EPF chairperson mentioned that the 1 percent dividend is equivalent to RM6.5 billion and that the total pay-out declared by Samsudin Osman as quoted in the news amounts to RM37.08 billion.
It needs to be mindful that the RM37.08 billion, although credited to individual accounts, still remains in the fund, at least most of it, and therefore the EPF has the ability to declare 6.4 percent as declared in the previous year.
The .7 percent, if added to 5.7 percent to maintain 6.4 percent as in the previous year, shall only incur an additional payout of around RM4.5 billion.
It should be sustainable because the fundamental objective of EPF is to ensure the contributors’ savings on retirement should be substantial.
Not represented by nominee submitted by MTUC
Secondly, the congress is disappointed that in declaring the dividend, the labour centre was not represented by the nominee submitted by the congress since February 2016.
The finance minister should not have usurped the constitutional powers of the congress when he rejected the nominee from the congress.
Such a rejection by the minister evidences his alleged abuse of powers to discriminate against the labour centre.
EPF and the finance minister have seemingly been undermining the representatives of the workers and not engaging with the congress constructively in matters concerning the workers.
EPF needs to ensure at all times that the funds of the workers should be expanded and used for the benefit of workers.
EPF has continuously invested and expanded funds of the workers in companies that are promoting anti-labour policies including laying off workers by using workers’ money itself for its capital to do business.
In Malaysia, the workers are in a pathetic situation, they are being bullied by irresponsible employers, the laws do not provide a safety net to avoid such exploitation, hiring and firing is rampant now and job security is at stake. Discrimination of workers is at the highest levels and the government is unable to prevent this abuses on workers.
Now even the workers’ savings are being used to further exploit workers and cause unemployment to the Malaysian workers.
The new leadership of the congress has written to EPF in December 2016 for consultation on dividend declaration but they, without responding, had merely written a letter inviting us for the announcement of the predetermined dividend.
The congress will continuously demand and pursue justice for the workers comprising 6.8 million active contributors to EPF.
Therefore in conclusion the congress demands the EPF board and the finance minister to declare 6.4 percent for the year 2016 as declared in 2015.
J SOLOMON is secretary-general, Malaysian Trades Union Congress (MTUC).
