RAWANG: A revised annuity scheme for Employees Provident Fund (EPF) contributors will be approved if it benefits the retirees, said Deputy Finance Minister Datuk Chan Kong Choy.
He said a positive revision of the annuity scheme by the EPF board would be welcomed as long as it could provide post-retirement security to those who opt for it.
A recent EPF study revealed that many retirees exhaust their EPF funds within three years after retirement. This is very unhealthy and contrary to the fundamental aim of the EPF, Chan said after opening the inaugural SMK Bandar Tasik Puteri Parent-Teacher Association meeting here yesterday.
Chan said that based on this unhealthy trend, a revised annuity scheme would be relevant to the 10 million workers in the country.
The increasing life expectancy of Malaysians also makes it necessary for the introduction of a retirement plan that will provide monthly income to retirees for 20 to 30 years.
In this context, a revision of the annuity scheme is a step towards the right direction, he said, adding that the proposed revision had not been submitted to the ministry yet.
The revision was still with the EPF board and there had not been any indication how the revised scheme would work, he said.
The EPF launched an annuity scheme in July 2000.
A year later, Prime Minister Datuk Seri Dr Mahathir Mohamad scrapped it following objections by MTUC over claims that the scheme paid low dividends.
However, the 286,000 contributors who had signed up for the scheme managed by insurance companies were allowed to continue.
An EPF source said the annuity scheme that was being looked at involved the optional Account Four contributions.
Cuepacs president Datuk N. Siva Subramaniam said the proposed revision of the annuity scheme was not clear and had not been discussed by the board yet.
MTUC acting president Mohd Shafie B.P. Mammal said the umbrella body would oppose it if the scheme did not benefit the public.
MTUC will support the scheme only if it is transparent and does not involve middlemen who are out to shortchange the public.
Even then, we have to carry out a thorough study on the revised annuity scheme, he said, adding that many people who subscribed to the earlier annuity scheme felt cheated.
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