EPF’s full-page advertorial in the newspapers cannot be a substitute for transparency,  good governance, efficiency or hard work  – as it is a gross waste   and  misuse of EPF funds to mislead the 10.3 million EPF contributors about meeting their expectations

Media Statement
y Lim Kit Siang

(Petaling JayaMonday): The Employees Provident Fund (EPF) should explain how much it is spending in running  full-page advertorials   which appear in the various language newspapers today. 

The EPF management should realize that the full-page EPF advertorials in the newspapers cannot be a substitute for transparency, good governance, efficiency or hard work although the advertisement is entitled “EPF WORKING HARDER TO MEET YOUR EXPECTATIONS”. 

The 10.3 million EPF contributors are entitled to object in the strongest manner the gross waste of EPF funds  to launch a most misleading EPF self-gratification advertisement drive, as the claim of  the EPF advertorial to  having met the expectations of the EPF contributors is not only  completely misleading which  cannot bear close scrutiny but most insulting and offensive. 

How can the EPF “spin doctors” have the temerity to claim success to meet the expectations of the 10.3 million EPF contributors in a year when they are getting the lowest dividend in 40 years at 4.25 per cent last year? 

In the advertorial, EPF claims that it has “always maintained a high level of transparency”.  How can EPF make such a claim when it has not been able to answer a whole array of queries, such as the following:

  • why  EPF had to set aside RM2.14 billion for “paper losses” in equity last year  which could have  been used to declare a higher EPF dividend of at least 5.43 per cent instead of 4.25 per cent;
  • why EPF had to write off over RM5 billion  for “paper losses” in equity and doubtful debts in the five years from 1998 to 2002, and is still sitting  on over RM10 – RM14  billion “paper losses” in equity  which  will force the further reduction of the EPF dividend in the coming years;
  • why EPF had failed to keep its administrative costs low and under firm control to ensure reasonable returns for the EPF contributors, as illustrated by the annual operating costs of EPF shooting  up 80 per cent from RM194 million in 1998 to RM350 million in 2001, when the EPF dividend had plunged by over 26 per cent from 6.8 per cent to 5 per cent for this period – and now to an even lower 4.25 per cent for last year; and
  • why the doubling of EPF  administrative costs have not been accompanied by  greater efficiency, better performance  or improved  quality of service.

In the advertorial, EPF promised  its  contributors that it will “continue to manage their contributions prudently, fully cognizant of its responsibilities to them for the long term and the need to provide for their retirement security”.

This meaningless  verbiage  cannot hide the fact that under the present EPF management, EPF contributors are heading for even lower dividends in the coming years.

What the 10.3 million EPF contributors want are not waste of EPF funds on full-page newspaper advertorials which do  not advance  EPF transparency and good governance, but a genuine policy commitment by the EPF Board and management to accountability, transparency and good governance to publicly justify  its management and stewardship of the RM200 billion EPF funds.

DAP leaders will ask for a meeting with the EPF Chairman, Board and management and put to a test their  claim in the advertorial  that “The Fund has always maintained a high level of transparency”.


* Lim Kit Siang, DAP National Chairman