PUTRAJAYA should use its reserves to help people mitigate the economic cost of Covid-19 instead of allowing Employees Provident Fund contributors withdraw their savings, said the Malaysian Trades Union Congress (MTUC).

The move, announced by Prime Minister Muhyiddin Yassin earlier today, should be scrapped, the group said in a statement.

“The MTUC stand is simple in the current situation – do not touch the workers’ EPF, cut their salaries or retrench them because the social repercussions are indeed serious.

“We urge the government to rethink this plan and scrap it,” MTUC said.

Muhyiddin said EPF contributors aged below 55 could withdraw up to RM500 monthly for the next 12 months from their Account 2.

The government’s move comes as businesses are affected by the Covid-19 outbreak and many are unable to work due to the movement-control order (MCO).

But MTUC said Putrajaya’s move will result in contributors’ loss of annual and compounded dividends in the long-term from funds that are meant for workers’ retirement.

“The government should have the moral courage to dig into its reserves and pump the money directly into the pockets of workers without having to compromise their old age savings. 

“Most members use their account two to reduce their housing loan repayment to save on their interests. Others also depend on this account for their tertiary education and medical needs,” MTUC said.

The group added that the move is akin to using workers’ savings to pump in RM50 billion into the economy for the rest of the year.

“This is not a morally right thing to do. It is a case of having to ‘rob’ from one’s own savings, arising from the failure of the government to protect its people.”

MTUC said it has proposed to the Finance Ministry this morning that Putrajaya should use its reserve funds to provide interest-free loans of at least RM5,000 each to needy families during the Covid-19 crisis.

Repayments can be through salary deductions once the situation remains to normal, the congress added.

It also disagreed with the move to allow EPF subscribers to reduce their monthly contributions by 4% starting next month, a plan announced before the Covid-19 movement control order.

MTUC said this will have an adverse effect on workers’ savings. – March 23, 2020.