The Malaysian Trades Union Congress (MTUC) will go ahead with a picket in major cities and towns tomorrow to object to the lowest Employees Provident Fund (EPF) dividend payout in 40 years.

In doing so, the trade union movement has chosen to ignore the 'advice' of the Human Resource Ministry to refrain from such action which the latter considers to be illegal.

'Peaceful' picket

The picket, planned since last month, is open to all EPF contributors. It will see workers gathering in front of the EPF headquarters in Kuala Lumpur at 4pm tomorrow.

There will be simultaneous demonstrations outside EPF branch offices in Johor Bahru, Ipoh, Kuching, Penang and Seremban.

The Malay Mail

today quoted trades union director-general Zulkifli Abdullah as calling o­n MTUC affiliates not to participate, since trade unions are o­nly allowed to picket o­n trade-related matters - and if the protest is located at the place of employment.

Therefore any plans to demonstrate o­n EPF issues are not covered under the Industrial Relations Act and may lead to action being taken against the MTUC and union affiliates, said Zulkifli.

Last month, Human Resources Minister Dr Fong Chan o­nn had asked the unions for some consideration in face of economic uncertainty over the Severe Acute Respiratory Syndrome (Sars) outbreak and the aftermath of the Iraq war.

MTUC also plans to submit a memorandum detailing workers' views o­n the low 4.25 per cent dividend announced for the year 2002, as well as other related issues, to EPF chairperson Abdul Halim Ali.

In a statement, MTUC president Senator Zainal Rampak said the picket would be a "peaceful and orderly", its main objective being to "collectively express the dissatisfaction of Malaysian workers over the management of their hard-earned money held by the EPF".

According to Zainal, the dividend declared for 2002 is the lowest ever in 40 years, and will end up impacting low and middle income workers the most.

Last month, Zainal had been the subject of criticism for failing to attend the April EPF board meeting in which the dividend announcement was made.

Recent EPF investments

The EPF is a national social security organisation operating through a provident fund with the mission of providing retirement benefits for its contributors.

The EPF Act guarantees a minimum annual dividend of 2.5 percent dividend. The fund recorded RM207.5 billion of accumulated assets as at 2002.

The last time the EPF dividend rate was lower than 5 percent was in 1962, when it was 4 percent. The highest rate was 8.5 per cent during the boom years of the1980s.

The fund's website revealed that about 75 percent of its monies is invested in fixed income instruments - government security, money market and loans - whose returns are tied to interest rates. The remaining funds go into the equities market.

In March, business weekly The Edge reported that the EPF had lent RM39 billion to corporations, RM500 million of which has not been repaid.

Together with the Pensions Trust Fund and the national debt restructuring body, Danaharta, the EPF received 76 percent of the unsubscribed portion of the Time dotCom IPO last year amid much controversy.