Explain unrealised losses, EPF told
Susan LoonePublished: Feb 27, 2001 10:18 AM | Updated: Jan 29, 2008 6:21 PM
The Malaysian Trades Union Congress (MTUC) has urged the Employees Provident Fund to explain why it has suffered 'unrealised' losses resulting in its lowest dividend rates in 25 years.
MTUC secretary-general G Rajasegaran told malaysiakini that workers are unhappy that one of the reasons given for the low rate is the provision for bad loans or 'unrealised' losses.
"What is this provision all about? Why is it this bad when EPF had always maintained in the past that the loans are government guaranteed?" queried Rajasegaran.
"Furthermore, EPF says it does not get involved in speculative investment, that it is always prudent and careful, so what has happened now?" he added.
Yesterday, EPF announced a six percent dividend for year 2000, the lowest declared by EPF since 1975.
EPF chairman Abdul Halim Ali reported that the lower dividend as compared with the figure in 1999 was due to an expanded membership base and a slightly higher provision of RM749.68 million for unrealised losses in the equity portfolio.
According to Abdul Halim, the provision is in accordance with the prudent accounting policy subscribed to by the EPF.
He said that the dividend rate of six percent for the year meant that a total of RM10.18 billion will be credited into the accounts of the 9.7 million members, compared with RM10.24 billion in net income for 9.5 million members in 1999.
He added that for year 2000, every one percent dividend declared amounted to RM1.62 billion compared with RM1.46 billion in 1999.
'Bad practices'
Rajasegaran said that Abdul Halim as the new chairman should make EPF more open, transparent and accountable to its contributors.
"He should immediately change or dismantle whatever bad practices that have been going on for years in that department," he said.
"Investment policies and activities must be made known in detail to the EPF board frequently and not withheld till the end of the year when nothing can be done by anyone anymore," he added.
MTUC has five representatives on the EPF board and Rajasegaran said that EPF has been keeping its investment polices 'under wraps', revealing only minutes or general details at board meetings, making it difficult for members to gauge the real situation.
Meanwhile, DAP chairman Lim Kit Siang called on EPF to explain how an expanded membership base has led to a lower dividend.
"We are entitled to a full explanation - why such low dividend rates when the GDP (gross domestic product) growth was the highest last year since the Asian financial crisis in 1997?" queried Lim.
"With lower GDP growth, EPF could still declare a dividend of 6.74 percent in 1997 and 1998 and 6.84 percent in 1999. What went wrong last year?" he said.
Lim added the announcement came as a shock particularly after Finance Minister Daim Zainuddin had said that Malaysia was expected to show a growth in GDP of more than eight percent for last year.
MTUC secretary-general G Rajasegaran told malaysiakini that workers are unhappy that one of the reasons given for the low rate is the provision for bad loans or 'unrealised' losses.
"What is this provision all about? Why is it this bad when EPF had always maintained in the past that the loans are government guaranteed?" queried Rajasegaran.
"Furthermore, EPF says it does not get involved in speculative investment, that it is always prudent and careful, so what has happened now?" he added.
Yesterday, EPF announced a six percent dividend for year 2000, the lowest declared by EPF since 1975.
EPF chairman Abdul Halim Ali reported that the lower dividend as compared with the figure in 1999 was due to an expanded membership base and a slightly higher provision of RM749.68 million for unrealised losses in the equity portfolio.
According to Abdul Halim, the provision is in accordance with the prudent accounting policy subscribed to by the EPF.
He said that the dividend rate of six percent for the year meant that a total of RM10.18 billion will be credited into the accounts of the 9.7 million members, compared with RM10.24 billion in net income for 9.5 million members in 1999.
He added that for year 2000, every one percent dividend declared amounted to RM1.62 billion compared with RM1.46 billion in 1999.
'Bad practices'
Rajasegaran said that Abdul Halim as the new chairman should make EPF more open, transparent and accountable to its contributors.
"He should immediately change or dismantle whatever bad practices that have been going on for years in that department," he said.
"Investment policies and activities must be made known in detail to the EPF board frequently and not withheld till the end of the year when nothing can be done by anyone anymore," he added.
MTUC has five representatives on the EPF board and Rajasegaran said that EPF has been keeping its investment polices 'under wraps', revealing only minutes or general details at board meetings, making it difficult for members to gauge the real situation.
Meanwhile, DAP chairman Lim Kit Siang called on EPF to explain how an expanded membership base has led to a lower dividend.
"We are entitled to a full explanation - why such low dividend rates when the GDP (gross domestic product) growth was the highest last year since the Asian financial crisis in 1997?" queried Lim.
"With lower GDP growth, EPF could still declare a dividend of 6.74 percent in 1997 and 1998 and 6.84 percent in 1999. What went wrong last year?" he said.
Lim added the announcement came as a shock particularly after Finance Minister Daim Zainuddin had said that Malaysia was expected to show a growth in GDP of more than eight percent for last year.
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