MTUC, Cuepacs oppose 3pct EFF contribution cut

The country's two biggest workers' unions disagree with Prime Minister Najib Abdul Razak's move to reduce the Employees Provident Fund (EPF) contribution of workers by three percent, as outlined under the 2016 Budget revision.

The MTUC, which represents 11.4 million workers in the private sector and Cuepacs, which represents 1.6 million public servants, have both expressed their concerns over the consequences of such a measure.

MTUC, which particularly opposes the automatic measure to reduce employees' contributions from March 2016 to December 2017, said it would write in to Najib.

"We will write a protest letter to the prime minister. He should not ask workers who wish to keep their EPF contributions at 11 percent to opt out," MTUC secretary-general N Gopal Kishnam said.

"He should instead ask those who are willing to have their EPF contributions slashed by three percent to eight percent, to fill in the form to opt in," he told Malaysiakini today.

In his 2016 Budget revision speech yesterday, Najib announced the move as one of the 11 key measures to stimulate the economy and increase private consumption expenditure by RM8 billion a year.

Gopal (photo) said the government should not target employees' retirement funds amid concerns that these funds may not be enough for them to lead a comfortable retired life.

"It is a violation of the EPF Act, which stipulates that employees should contribute at least 11 percent of their monthly income," he noted.

Gopal further questioned how a small three percent cut could contribute to the economy.

"If the government wants to help the middle and lower income group, it should encourage employers to pay a cost-of-living allowance (Cola) to their staff," he said.

"The government came out with the same three percent EPF cut idea in 2009 but it wasn't widely accepted. Why can't the prime minister learn from that experience?" Gopal asked.

'Do not extend'

When contacted, Cuepacs president Azih Muda said: "Cuepacs does not quite agree with the three percent reduction in the EPF contributions of the workers."

Azih said many Malaysians were not willing to see their retirement funds being slashed.

He urged members of the public to tell the government to maintain their EPF contributions at 11 percent.

"I also suggest that the government only implements the measure this year. Do not extend it till December 2017, " he said.

Without elaborating, Azih urged the government and the employers to assist workers once the measure takes effect. -Mkini