> MTUC wants EPF deduction reversed

The Malaysian Trades Union Congress (MTUC) wants the government to reverse the procedure for the deduction of three percent of the workers statutory contribution to the Employees Provident Fund (EPF).

Under the present procedure, employers will deduct the three percent at source and if the employees wish, they can opt out by signing Form KWSP 17A (AHL).

But MTUC general secretary G. Rajasekaran said by doing the deduction at source, it became somewhat "compulsory" although in principle it appeared to be voluntary, because majority of the workers would not bother to sign the KWSP 17A form.

He said to be fair, the government should instead reverse the procedure whereby asking only those who wish to opt for the deduction to do so by signing the KWSP Form 17A.

"In this way I am sure majority of the workers would not want to reduce their contributions." he said.

Rajasekaran said the EPF contributions were savings meant for old age and it was important that employees did not reduce such savings.

He was commenting on the economic stimulus package announced by Deputy Prime Minister Datuk Seri Najib Tun Razak on Tuesday, in which one of the proposals was a three percent reduction -- from 11 percent to eight percent -- in the statutory contribution by employees to the EPF.

Rajasekaran said five years ago EPF did a study and found that 60 percent of the contributors used up all their savings within four years of their retirement at the age of 55.

"Now with the Malaysian average life expectancy around 70 to 75 years, imagine what they would do for the next 10 to 15 years once their EPF savings have dried up," he said - Bernama.