PETALING JAYA: In the wake of squabbles over Employees Provident Fund (EPF) withdrawals to help flood victims, an economist has suggested that employers establish a special fund to help their staff during emergencies.
Carmelo Ferlito of the Center for Market Education said this was a better way of helping employees in need than allowing them to dig into their EPF savings.
“Current emergencies such as floods have proved that the existing safety net, including the EPF and the Social Security Organisation, is inadequate. We need to increase the available options, such as this special fund,” he told FMT.
“With the agreement of employees, employers could invest in a specific emergency fund in collaboration with private insurance firms or banks, with a small percentage from the employees’ pay to be put aside for it.
This money could be requested by employees in cases of emergency. If the fund is not used, it will go into increasing the workers’ private pension fund at the end of their working life.”
In the short term, he said, the government should support flood victims with funds from the expected windfall tax revenue.
“It could also divert resources from the country’s Covid-19 fund as we have received comforting news that the Omicron infection is almost like a common illness,” he added.
Another economist, Yeah Kim Leng of Sunway University, said business could be encouraged to provide financial and other assistance, such as subsidised household items to replace those damaged by the floods.
He said these businesses might or might not be employers of flood victims.
“Affected households could be aided with interest-free loans that financial institutions could furnish as part of the tax exempt or CSR (corporate social responsibility) programme,” he said.
“In addition to this, priority for job and income generation opportunities should be given to flood victims whose livelihoods have been affected.”
In recent days, several quarters have called for another one-off withdrawal from EPF savings to be allowed for flood victims. Umno Supreme Council member Puad Zarkashi, for instance, has criticised finance minister Tengku Zafrul Aziz for refusing to allow it.
The government has previously allowed EPF contributors to dip into their savings as an emergency measure against hardship caused by the Covid-19 pandemic.
A total of RM101 billion has been withdrawn by seven million EPF members under three withdrawal schemes.
The emergency withdrawals have left 6.1 million members – nearly half of the fund’s contributors – with less than RM10,000 in their accounts.
Of that number, 3.6 million members have less than RM1,000, a far cry from the RM240,000 the EPF has set as the minimum amount members should have when they reach the age of 55 in order to have a “decent retirement”.
Source: https://www.freemalaysiatoday.com/category/nation/2022/01/05/bosses-urged-to-start-fund-to-aid-workers-in-emergencies/