Dispose investments in 1MDB, Harapan leaders tell EPF

Pakatan Harapan leaders today urged the Employees Provident Fund (EPF) to dispose its investments in 1MDB as soon as possible.

In a joint statement signed by Parti Amanah Negara’s Dzulkefly Ahmad, PKR’s Wong Chen and DAP’s Teresa Kok, the opposition coalition claimed that the decrease in EPF’s 2016 dividend rate was due to EPF’s investment amounting to RM1.72 billion in 1MDB.

Apart from the EPF, Pakatan Harapan also urged government institutions such as Tabung Haji and Retirement Fund Inc (KWAP) to dispose their investments in state investment fund.

The EPF, they said, was facing financial problems which would in turn affect EPF depositors.

“EPF’s investment of RM1.72 billion is a huge amount, more so since the funds are from the people’s savings,” they said.

Citing Finance Minister II Johari Abdul Ghani who said that EPF’s investment in 1MDB did not pose any risks, the trio however argued that 1MDB bonds held by EPF involved higher interest rates than bonds from government institutions at 9.85 percent.

“1MDB’s financial problem has become a financial risk not only to the company but to the Federal Treasury especially since 1MDB faces the risk of cross default that can seriously affect the country’s financial system."

Supporting the Malaysian Trades Union Congress’ (MTUC) call for the 2016 EPF dividend rate to be increased, they said the announcement of a 5.7 percent dividend rate compared to 2015’s 6.4 percent rate was far from the government’s aim to have its citizens to have more savings.

The EPF last week declared a dividend rate of 5.7 percent for 2016 with the total payout amounting to RM37.08 billion.

Prime Minister Najib Abdul Razak said the 5.7 percent dividend rate announced by the EPF for 2016 was good enough given the challenging conditions in the global economy last year.

MTUC however urged that the EPF declare a 6.4 percent dividend rate for 2016, the similar rate announced in 2015.- Mkini