The recent proposal of the Employees Provident Fund (EPF) - disallowing contributors to withdraw their total savings at age 55 and scrapping the one-third withdrawal at 50 - has elicited strong criticisms from the public over the weekend.

Contributors, unionists and politicians continued to lash out at the EPF board after the proposal was made known earlier this week.

Malaysiakini's office was also inundated with calls from readers over the weekend expressing anger, disgust and dismay over the new strategy.

"Please tell the EPF board to mind their own business. We know how to handle our money," was the tone from one reader, wishing to be known as KK Lee, which probably says it all.

"A person is already considered old upon reaching 55. Why hold back what he has toiled for all his life. It's not fair, it's not right, it's also morally wrong!"

Lee said that most Malaysians know how to manage their savings and it is only a small minority who used them up within three years of withdrawal.

"The EPF cannot use that as a reason for its current proposals. It's one lousy excuse", he remarked.

Under the current scheme, EPF contributors are given three options to withdraw their money from the fund when they reach retirement age at 55. It could be one lump sum payment, periodical payment of savings or annual dividend paid on savings.

However, under the new proposal, they are only allowed to take out 20 to 30 percent of their total savings and the rest being paid out in monthly payments over 15 to 20 years.

The EPF also proposed to scrap the one-third withdrawal at 50 altogether.

Unlawful action

DAP chairperson Lim Kit Siang said the proposal is unlawful as it contravenes the Employees Provident Funds Act 1991.

"The DAP will challenge its legality in court as a public-interest test case if it is implemented," he added.

Federation of Malaysian Consumers Associations president Prof Mohd Hamdan Adnan has described the proposal as "committing daylight robbery" and it would infringe on the basic human rights because the money did not belong to the fund.

"Many may not even live for 15 and 20 years after reaching 55 years of age," he was quoted as saying in the Star.

Consumers Association of Penang president SM Mohd Idris said the new strategy will lead to people's speculation that the fund does not have enough ready funds to match its obligation under the current system.

Other leaders from the government quoted in the Star also urged the EPF to exercise due caution when introducing a new system.

MCA vice-president and its economic bureau chief Dr Fong Chan Onn said the proposed strategy would affect those who want to make investment.

Gerakan vice-president and Penang Chief Minister Dr Koh Tsu Koon (photo) said EPF should not rush into the new strategy before consulting the contributors.

DAP secretary-general Kerk Kim Hock and Parti Keadilan Rakyat secretary-general Abdul Rahman Othman also opposed the proposal saying that contributors should have the final say on what they want to do with their hard-earned savings.

It's people's money

Meanwhile, Prime Minister Abdullah Ahmad Badawi said contributors should be allowed to decide on the amount to be taken out from their EPF savings as it was the people's money.

"Perhaps they should be allowed to save some and leave some in the EPF to earn dividends and profits," he was quoted in Bernama as saying.

The premier, who is also the finance minister said the government was getting views from the people on the proposal.

On April 18, EPF had declared its last year dividend rate at 4.25 percent, the lowest-ever dividend rate in 40 years.

The reduced returns had led to nationwide pickets by the Malaysian Trades Union Congress, as well as earned a sharp rebuke from the DAP.

The EPF is a mandatory saving funds for private sector workers in Malaysia. It has 10.3 million members.