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Tan Sri Abdul Halim Ali Must Explain The Discrepancy Of EPF Giving Only 4.75% Dividend To 5.1 Million Members When Gross Income Increased By 7.1% For 2004.


Press Statement
by Lim Guan Eng  


(Petaling Jaya, Tuesday): EPF Chairman Tan Sri Abdul Halim Ali should explain the gross discrepancy between EPF giving out only 4.75% dividend to 5.1 million members when gross income has increased by 7.1% for 2004. Tan Sri Abdul Halim  had said that gross income of RM 11.8 billion last year was 7.1% higher than RM 11 billion in 2003. The 7.1% increase in gross income only highlights how unfair is the low dividend rate of 4.75% in 2004 which increased by 0.25% from 4.5% in 2003.

Assets increased by 220.2 billion in 2003 to 240.4 billion in 2004. The RM 11.8 billon gross income gives a rate of return of gross income to assets of only 4.9%. Such low rate of return is not compatible with preferential treatment given to EPF to invest in blue-chip stocks and high-value government projects. Clearly the membership of the EPF Investment Panel should be reviewed and replaced with more professional members with a track record of delivery and performance.

 

EPF’s poor performance contrasts sharply with the performance of Lembaga Tabung Angkatan Tentera (LTAT) which declared a dividend and bonus of 15.75% for 2004 involving RM401.4 million as compared with 10.75 percent in the previous year.  DAP is not surprised that LTAT’s dividend and bonus leapt by 5% or almost 50% increase to 15.75% in 2004 from 10.75% in 2003. After all, Malaysia’s economic growth rate increased by almost 2% from 5.3% in 2003 to 7.1% in 2004.

 

What is surprising though is why EPF’s dividend for 2004 remained so low at 4.75% when LTAT can perform so well on the back of a 7.1% economic growth rate.  There is no economic rationale or logic that EPF could declare a dividend of 4.5% when the economic growth rate was 5.3%, a variance of only 0.8%, but not declare a higher dividend of at least 6% when the economic growth rate had improved to 7.2%.  

 

In other words, why increase the dividend rate by only 0.25% when the economic growth rate had gone up by almost 2%. Clearly the weaknesses and problems within EPF must be identified and dealt with immediately. To protect the interests of all Malaysians who are contributors towards this fund, DAP calls for the establishment of a Special Committee of Inquiry to resolve these problems.  

 

DAP believes that Malaysian workers will no longer accept low dividend payments from a clearly non-performing EPF. If the government is serious about establishing a prompt, efficient and effective delivery system, the EPF Board and Investment Panel must be completely overhauled and revamped. 

To prevent such bad loans given to political cronies, there is a need for an independent EPF Investment Panel and EPF Board. To ensure accountability and transparency, qualified professionals and opposition parties must be represented to ensure that EPF performs its statutory duty as a custodian of Malaysian workers’ trust fund

(05/07/2005)      

                                                       


* Lim Guan Eng, DAP Secretary-General
 

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