MEF's reluctance over pension fund riles MTUC
Its president, Syed Shahir Syed Mohamud, said: “If it is a question of unfairness, then what about the unfairness of employers to the employees?”
Syed Shahir was responding to MEF’s appeal to the Human Resources Ministry to reconsider its proposal to set up new pension and retrenchment funds.The MEF is not in favour of the proposal, claiming it will have a major impact on the cost of doing business.
MEF felt that the funds were unfair and costly for private sector employers as they would have to make a statutory contribution to the Employees Provident Fund (EPF) and also to the proposed new ones.
Said Syed Shahir: “It’s not only mandatory for the employers, but the employees, too, have to contribute to EPF. “In fact, the employers are only contributing 1% (12% of their employees’ monthly salary) higher than the employees (11% monthly).”
Syed Shahir said the pension and retrenchment funds was actually a 10-year-old idea that been waiting for its time. “It was MTUC which had proposed this idea more than 10 years ago. Our proposal was sent to (former) prime minister Dr Mahathir Mohamad. But it was put on hold,” he said.
He said MTUC had always held that it was important to provide a safety net for employees. He said there were times, during pockets of national economic crisis, when the situation was really unfair to the employees, who had worked in their respective companies for more than a decade.
“During economic crisis in the 1970s, 1980s and 1990s, many workers were retrenched but compensation to them was low and inadequate. There were even times when retrenched workers didn’t get anything at all,” he said. He cited a company in Penang some years ago, where it was closed down and the long-serving workers did not get any compensation.
“People want to live... But how to live... without any adequate fund?” he said, adding that the government’s stride towards high income economy must also include provisions for adequate security for working Malaysians - Agencies.
