A media veteran urged the Government to be cautious in allowing contributors easy access to Employees Provident Fund (EPF) savings, saying it may be detrimental to their own future.
“If the EPF contributors are allowed to withdraw their savings at will, as suggested by some popularity seekers, the retirement fund will have to sell billions of investments to raise cash to pay them.
“This will depress share prices and may even force it to sell its assets at a loss. In time, it may not even have enough capital to generate meaningful returns to its contributors.
“This was how many of such funds around the world went bankrupt. Sadly, because many Malaysians are uninformed or are just too lazy to think, these liars and hypocrites have a field day misleading them,” said blogger Datuk A. Kadir Jasin, in a Facebook post.
During the debate on Budget 2021, Umno politicians have threatened to vote the budget down if the Government does not allow the public easy access to withdraw their EPF savings and called for a blanket loan moratorium extension.
Due to pressure, the Government decided to launch the i-Sinar programme, where contributors will be allowed to withdraw certain amount from Account 1, based on the amount of savings.
This was on top of the i-Lestari programme launched in March, where contributors can withdraw up to RM500 monthly from their Account 2.
Among the proponents of the Account 1 withdrawals were former Prime Minister Datuk Seri Najib Tun Razak and former Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi.
Banks, gov’t linked institutions affected
Kadir, who is also former Prime Minister Tun Dr Mahathir Mohamad’s media adviser, reminded the public that supporters of the programme were the same ones who plunged the nation into a lot of debt in the past.
“Some of those people who are today riding on the loan moratorium and EPF withdrawal bandwagons for cheap publicity, are the same people who plunged the country into debt.
“When COVID-19 struck and the economy nosedived, those in debt were among the most vulnerable.
“It’s easy to issue media statements or make social media postings condemning banks for not extending loan repayment moratorium and wanting the EPF to allow unlimited withdrawals by contributors but you cannot deny the impact it will cause to the institutions,” he said.
On the bank loan moratorium, Kadir reminded naysayers that the measure affected the banks to the tune of RM66.9 bil, citing statements by Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.
He added that the despite the setback, banks continued to facilitate borrowers through targetted moratorium plan.
“While it may be true that banks can withstand losses due to the moratorium, but investors who hold their stocks and shares will suffer instead.
“Prices of banking stocks had tumbled since the enforcement of the moratorium,” Kadir remarked.
He said that banks are among the most profitable counters on Bursa Malaysia, and major government-linked investment companies (GLICs) are among their key investors.
Therefore, any losses by the banks in both profitability and market capitalisation will have a negative impact on the GLICs like EPF, Permodalan Nasional Bhd (PNB), Khazanah Nasional Bhd and Tabung Haji.
“And hopefully, the meagre 4.25% return to Amanah Saham Bumiputera (ASB) unit holders announced by the PNB on Dec 23 would not be a preview of the bad things to come when the EPF and other investment companies in the public and private sectors, announce their 2020 dividends,” Kadir said. – Dec 31, 2020
