PETALING JAYA: Several groups have called on the Government to ensure that private pension funds are properly regulated with no room for abuse.
The scheme, they said, should be carefully handled to ensure the public’s money is protected and a safety net put in place to make sure those who invest in the funds still get returns even if investments do not pan out.
Minister in the Prime Minister’s Department (in charge of the Economic Planning Unit) Tan Sri Nor Mohamed Yakcop had announced yesterday that the funds, to be introduced by the middle of next year, would provide an avenue for those who are self-employed to save for their old age and also enable employers and employees to contribute more. The Securities Commission would regulate the funds which would be managed by private companies dealing in fund management.
Federation of Malaysian Consumer Associations (Fomca) secretary-general Muhammad Sha’ani Abdullah said there must be transparency in the management of these funds as well as proper checks and balances and strict guidelines.
“The funds must not be a burden to the people. The Government must ensure better returns no matter what happens to the investment.
“For example, some people have transferred their EPF money elsewhere including to unit trusts for better returns only to lose money,” he said.
Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan said there must be some form of a guarantee of returns such as 10% annually.
“In the past, we have had private schemes where agents ended up earning so much commission and contributors were not benefiting from the investments,” he said.
Shamsuddin said employers were unlikely to contribute to the private fund if there were added costs.
“For them, EPF is the safest scheme as employers need not pay any extra cost,” he added.
He said a suitable term should be used to describe the fund, adding that the word pension should not be included as “pension is a government scheme which is non-contributing and given based on service.”
Businessman Suresh Anthoney said performance of funds must be guaranteed to attract investors to pump in their money into the private pension funds.
“The money must be invested properly and not in funds that will die off in two to three years.”
Meanwhile, MTUC president Syed Shahir Syed Mohamud expressed disappointment that they were not consulted before the announcement of the fund was made.
“The Government must engage stakeholders so that we can discuss the proposal.
“We need to study its effects and benefits to the people as we don’t want to be taken for a ride,” he said.