The Malaysian Trades Union Congress (MTUC) today urged Putrajaya to provide alternative financial solutions for those suffering from the fallout of the Covid-19 pandemic instead of having them depend on their Employees Provident Fund (EPF).
MTUC secretary-general J Solomon said he was shocked to learn that EPF had approved withdrawals from 3.5 million contributors amounting to RM1.66 billion under the i-Lestari scheme.
He said EPF money should be for a rainy day and taking RM500 per month for 12 months will result in a loss of RM6,000 per year and those who have opted for it will lose their dividend as well as the substantial compounding interest accumulated over the years until retirement.
“With ample financial liquidity in the country, the government should source for funds, including obtaining soft loans from EPF to help workers, especially the 600,000 who have lost their jobs so far.
“The huge number of i-Lestari applicants shows how cash-strapped the workers are and not necessarily due to Covid-19 pandemic,” Solomon said in a statement.
Solomon said he was shocked at Deputy Finance Minister Datuk Abdul Rahim Bakri’s statement recently that the RM500 withdrawals were intended to inject RM3.3 billion into the economy monthly.
“His statement makes it patently clear that the hard-earned savings of workers are being diverted and used as an instrument to prop up the economy,” he said.
The crediting of approved i-Lestari withdrawals into members’ bank accounts began on May 4 and extended till May 18.
i-Lestari is available for Malaysian citizens, permanent residents and non-Malaysians aged 55 and below that has an EPF account. The facility will allow members to take out funds only from Account 2.
Each member will be permitted to withdraw from a minimum of RM50 to a maximum of RM500 per month, and the scheme will be available from April 2020 to 31 March 2021 (12 months). – MMO