MTUC slams Muhyiddin's EPF announcement

Umbrella trade union body MTUC has lambasted the move by Prime Minister Muhyiddin Yassin to allow EPF contributors to withdraw up to RM500 a month from Account 2 for the next 12 months beginning April 1.

"The announcement came as a shock to us as the move will deplete their long-term savings," said MTUC secretary-general J Solomon (photo).

"At a time when we are asking the government to inject funds to help the millions of workers in the country who are directly affected by the devastation of Covid-19, it is instead resorting to asking the workers to take money out of their provident funds meant for old-age savings and spend it," he added.

Solomon said the move by Muhyiddin's Perikatan Nasional government would result in the loss of annual and compounded dividends in the long term.

When making the announcement earlier today, Muhyiddin said the initiative is expected to benefit 14 million EPF members with a withdrawal sum estimated at RM40 billion.

"The government, whether it realises it or not, is trying making itself look good by allowing this. It is using the workers’ savings to pump in RM50 billion for the next nine months," said Solomon.

Not mincing his words, he said it was a morally-flawed move on the administration's part.

"It is a case of having to 'rob' from one’s savings, arising from the failure of the government to protect its people," he said.

The MTUC urged the government to use its reserve funds to provide interest-free loans of at least RM5,000 each to help these members to sustain themselves and their families during this crisis.

"They should be allowed to start repaying through salary deductions once the situation remains to normal."

Solomon pointed out that most members use their Account 2 to reduce their housing loan repayment to save on their interests.

"Others also depend on this account for their tertiary education and medical needs. Many of them have already opted to reduce their monthly contributions by four per cent, which will hurt their savings.

The current situation, said Solomon, requires ingenuity from economic planners to ease the burden of all the workers in the country, not to add salt to a wound.

"Do not touch the workers’ EPF, cut their salaries or retrench them because the social repercussions are indeed serious," he said, in calling for the PN administration to scrap the move. - Mkini