Friday, February 10, 2012

Pakatan Memorandum to EPF on Low-Cost Housing Loan

EPF PROVISION OF RM1.5 BILLION LOAN FOR LOW-COST HOUSING IN KUALA LUMPUR

On behalf of Members of Parliament from Pakatan Rakyat, we hereby submit a memorandum calling upon the Employees Provident Fund (EPF) Board of Directors as well as its Investment Panel to review and reject the proposed plan to extend RM1.5 billion in high-risk loans for low-cost housing purchasers in Kuala Lumpur.

  1. We fully support measures by the Government to assist the poor to own their own properties and remain cognizant of past efforts that have been undertaken by the government without drawing on workers’ retirement savings.
  2. We are extremely concerned that Employee Representatives and members of the EPF Board have denied knowledge of the special loan scheme. Former EPF board member, Sabah Commercial Employees Union (SCEU) general secretary Rebecca Chin who only recently retired a week ago, and current Malaysian Trades Union Congress (MTUC) President Mohd Khalid Atan have confirmed that they were unaware of the special loan scheme and no endorsement was made by the Board.  This gives rise to the suspicion that the Federal Government has imposed the obligation upon EPF without due process.
  3. MTUC Secretary-General, Abdul Halim Mansor has also publicly objected to the plan by EPF to extend RM1.5 billion in loans to low-cost housing purchasers who fail to secure financing from commercial banks.
  4. Depending on the structure of the loan scheme, it may be in breach of the EPF Act 1991 as there are no provisions for EPF to extend loans to individuals with low-cost housing units as collateral.  We call upon the Board to make available the details of this special loan scheme to provide the assurance that it is in compliance with the Act.
  5. We are also seeking confirmation on the statement by the Minister of Federal Territories and Urban Well-Being that several banks and financial institutions were approached and that only EPF ‘stepped forward’. The names of these banks and their rationale for declining to participate must be disclosed to justify the EPF’s purported willingness to “step forward”.
  6. Most importantly, the EPF must not be turned into a “lender of last resort” by any party, including the Federal Government for its social welfare programmes.  The scheme will set a bad precedent for the fund being abused politically to win votes in the future.
  7. While the Prime Minister, Datuk Seri Najib Razak has tried to play down the scheme by claiming that the RM1.5 billion loan is only a fraction of EPF fund size, such infraction could well be expanded for other purposes and extended to other states in the country thus over-stretching the risks that the EPF is forced to take without reasonable returns to tally.

The EPF “aims to provide financial security for its members’ retirement purposes. The fund is committed to preserving and growing the savings of its members in a prudent manner in accordance with best practices in investments and corporate conduct.”  Hence, it is Pakatan Rakyat’s view that it is wrong, wicked and immoral to exploit and risk the workers’ hard-earned monies and savings in a special home financing scheme for those with weak credit ratings.

The EPF Board of Directors and its Investment Panel must exercise their powers in the interest of the contributors, above any other parties with vested interests, including the Federal Government.  It is for the Federal Government to assume the responsibility of social welfare by providing a roof over the head of all Malaysians, and not the responsibility of the EPF.

Thank you.



Yours faithfully,

NURUL IZZAH ANWAR
MP Lembah Pantai

TONY PUA
MP Petaling Jaya Utara

DR DZULKEFLY AHMAD
MP Kuala Selangor

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