The Employees Provident Fund (EPF) is the singular of the largest assets supports in the universe which has amassed some-more than RM 440.52 billion in 2011. And this represents the hold up assets of about twelve million Malaysians. Of march income kept underneath the pillow would not beget some-more income. It has to be invested prudently. The emanate right away is has the EPF underneath "Pakatan Rakyat"-led supervision invested the hard-earned assets of Malaysians judiciously. Until 2011 the supervision has already used 60 per cent of the people's assets upon various loans as well as investments.
The twelve million EPF contributors have been not somewhat delighted with the government. Many EPF contributors surveyed across the republic have the notice which they have been taken for the float by the government. Their life-long assets is not giving them great returns. "The supervision is taking large loans from the EPF. Could this be the reason because the EPF is right away getting employers to enlarge their imperative contributions from 12% to 13%?" asked the 50-year-old singular mom trustworthy to the government-linked association (GLC).
Government still due the EPF RM240 billion
On 23 Jun 2011, the EPF pronounced which 60 per cent of the supports have been lent to or borrowed by the Malaysian government. As during Dec 2010 the supervision still due the EPF about RM240 billion. In alternative words, the "Pakatan Rakyat"-led supervision has already outlayed or used 60 per cent of all the savings. The actuality is it does not unequivocally have the great lane record of how to mana! ge the m anage to buy sensibly. 2012 will spot the 15th year of budget necessity by the Federal supervision with no sign of monetary intelligences.
If income lent to the supervision is used for profitable blurb operation they have been wondering because the division to the EPF contributors is so low hovering around 4 to 5% prior to 2011. "They have been profitable us the insignificant dividend. We have been temperament the weight of abating returns," pronounced the comparison clerk trustworthy to the chemical industry in Kemaman. "The insignificant division customarily indicates which the EPF income is not invested in rewarding blurb operation though those with links to "Pakatan Rakyat"," she added.
"Even the latest 6% division came as no warn to the contributors. This is the one-off event which customarily happens when "Pakatan Rakyat" is confronting the general election. All figures will normally go up during this time dividends for PNB section trusts (more than 7 per cent including bonus), Tabung Haji (6 per cent) as well as so on," she reproved.
High-risk no-return investments
The EPF contributors have been right away worried which their income has gone in to high-risk no-return investments. The Auditor-General's Report 2010 indicated which the EPF had authorized loans worth an astounding RM55.1 billion not corroborated by supervision guarantees. The thirteen debtors however were not named. The Auditor-General's Report 2010 additionally found customarily the singular of the thirteen debtors was competent to acquire the loan though such the guarantee. That particular debtor was extended credit worth RM21.3 billion.
This form of lending contingency have obviously side-stepped great practices as well as apposite monetary procedures. It additionally reflects upon the miss of transparency as well as accountability upon the supervision part.
"They have been gambling with the people's hold up assets for their ea! rly reti rement as well as old age. Things have been never pure as well as we don't essentially know what's function to our savings. A lot of things have been dim from us. What have been the trade unions doing? The board of directors as well as the method of Finance?" chided the 43 year-old comparison physical education instructor with the manufacturing company.
Instead of arising holds which has the better liquidity the borrowers find the short-cut to put their hands in to the EPF's till. These have been customarily borrowers who cannot secure loans from the banks or from any general sources. Taking the outrageous loan from the EPF customarily with the very low seductiveness rate is the singular sure approach of getting their blurb operation starting regardless of the competitiveness. On this basement too the supervision is gladdened to assistance if these companies destroy in their business;
There will be large monetary implications to the country's manage to buy as well as the EPF when these companies were to default upon their payments or go bankrupt. However, the EPF can give cheaper loans than blurb banks to GLCs as well as associate companies to save them from bankruptcy as well as in the little cases make large enlarge from the people's hard-earned contributions.
"This is not income which belongs to the state. It's the people's pension fund. But it is being used as well as abused for chiefly domestic purposes," pronounced the techer in the internal in isolation university.
How they can compensate dividends
It is interesting to find out how the EPF can compensate dividends of 4 to 5% when their earnings from their outrageous loans have been customarily not some-more than 2 to 3%? They have been practically not creation many income out of these investments when the interests have been charged during these figures. And when it comes to profitable dividends this does not come from blurb operation enlarge though they ha! ve to se ll the little of their interests in the listed companies, or else nothing many could be paid to the workers.
"Or else how can the supervision compensate the division of + or - 5 % when banks' FD rates have been reduction than 3.5%, the little certitude supports have been losing money, the little GLC's have been additionally you do badly?" chided another 39-year-old bank executive
In alternative words, the EPF is essentially not you do any viable blurb operation though aiding the supervision to assistance the little "Pakatan Rakyat"-linked companies as well as the GLCs. When these businesses destroy the supervision has again to bail them out as well as income from the EPF, among alternative sources, is used.
"The Employees Provident Fund (EPF) sold the whopping RM441.09mil worth of Malaysia-listed equities upon Mar 7 alone, in line with the direction of active disposals over the last dual weeks." reported the internal daily.
"Bursa Malaysia filings showed which upon Mar 7, the EPF along with the portfolio managers dumped the sum 83.68 million shares upon the open market, substantially some-more than the 7.4 million shares it had acquired the same day. The series of shares disposed of represents roughly half the sum volume traded which day, which stood during 173.14 million shares. Fund managers reckon which the account was merely taking profit."
To the economists, the EPF needs the income to compensate the "feel-good" pre-election division of 6% to the contributors.
Controversial NFCorp
Unlike dealing with blurb banks dealing with the supervision or the EPF which is underneath supervision carry out the interests incurred would normally be around 2% or reduction for any loans since out. Take for instance the argumentative NFCorp . It was since the soft loan of RM250 million from the supervision with customarily 2% seductiveness rate as well as the five-year beauty duration prior to repayment. E! ven earn ing from this amount is utterly argumentative as in many cases they finish up as non-performing loans as well as when payment is defaulted the lender will be in trouble. But in many cases the supervision will step in to bail the unsuccessful companies by regulating taxpayers' money, the EPF or Petronas dollars.
"Being an EPF contributor, we am not surprised. The EPF has been giving an normal 4 to 5 % lapse over the past 10 years. Now we know with facts because they have been giving customarily such low rate of return. Take in the unofficial acceleration rate of 4%, this makes our genuine lapse during customarily 1 % or nil," quipped the 54 year-old-worker in the in isolation firm.
Rightfully, workers should not be happy with 5% per cent dividends in this context. All assets will have to take in to consideration of unheeded worth of their assets due to inflation.
"Just imagine if the EPF welcomes the prolongation of early retirement age to 60 afterwards which contributors cannot repel their assets for another five years. This will customarily good the supervision more," pronounced the 43 year-old woman executive with the internal bank.
RM6.5 billion loan to Felda
RM6.5 billion loan was taken by Federal Land Development Authority (Felda) from the Employees Provident Fund (EPF). It seems the EPF matter had stated which the association regarded the loan as an investment which could minister to the "better division achievement" for the contributors. But if Felda, as claimed by the supervision is in sound monetary figure because the RM6.5 billion loan from the EPF? Why not from the banks or alternative general lenders? Of march these lenders would look in to Felda's risk rating as well as the seductiveness rate will be higher. It cannot be the meagre 2% interest. Thus regulating the EPF income will be the many available for the supervision to avoid all these hassles.
Beyond that, if Felda has the healthy bank ! change o r income reserves as well as claims to have assets worth some-more than RM19 billion because contingency it bother to take the outrageous loan from the EPF? And is the supervision pure upon all transactions involving the EPF the amount of loans taken, who have been those since the loans, their certification as well as the distinction as well as the detriment incurred to illustrate far? A comparison physical education instructor of the association has this to say, "the EPF has not been pure in the dealings, generally pertaining to the investments as well as "unrealised losses".
Government debt stands during 53%
Government's borrowing is not risk free. If the supervision borrows disproportionately in propinquity to the GDP as well as though exercising judiciousness upon the projects it is financing, the long-term implication can be disastrous. The country's federal debt turn reached RM456 billion during the finish of 2011, which is the distinct 88.4 per cent enlarge from the RM242 billion in 2006. This debt turn will further enlarge with some-more borrowings to develop some-more projects.
The Constitution of Malaysia caps supervision debt during 55 per cent of GDP. As of thirty Jun 2011, supervision debt stands during 53 per cent though this figure customarily includes supervision borrowing, not open borrowing. When both supervision as well as open borrowings have been encompassed the figure might surpass distant some-more than the 55 per cent cap. Seemingly when it touches 55 per cent, the BN supervision will officially be in crisis as well as the Constitution might need to be altered to enlarge borrowing or presumably it will require the bailout. But with all the uncertainties in the universe economies, with reduction prudent monetary supervision the Malaysian manage to buy can crumble during any time due to this "financial crunch".
Unlike developed countries with strong fundamentals similar to the US, where debts as well as s! pending go some-more than assets the tiny nation similar to Malaysia cannot sustain the vigour of the 'financial crunch". Foreigners will remove certainty in the Malaysian manage to buy similar to what has happened to Greece. Printing some-more income will not finalise the complaint as high acceleration will set in as well as income will remove the value. This will start internal as well as general businesses.
It's when rating agencies such as S&P's or Moody downgrade Malaysia's sovereign rating by 2 or 3 points will infer the nation has exceeded the limit. And this will cause an abrupt thrust of the ringgit. That's what has happened to Greece where the supervision had to write off 50 per cent of their outstanding supervision loans. And if this happens to Malaysia, the EPF will be asked to take the 50 per cent cut of outstanding debt due by the government. More than half of savers' EPF income will be mislaid as well as the "Pakatan Rakyat"-led supervision would afterwards plead to the people to sojourn patient as well as be patriotic. And after some-more than thirty to 40 years of working tough worker's EPF assets would shrink. Dividends paid will all lessen as well as even the income saved will turn half the value. Printing some-more income is not starting to help.
Refused to accede to the funding
Venturing in to any non-profitable housing intrigue will criticise the interests of the EPF because the buyers will not be able to or will not pay off the loan. The supervision has the SPNB (Syarikat Perumahan Negara Bhd) which was initiated in1997 to provide for affordable homes to the poor. Now comes PR1MA (Perumahan Rakyat 1Malaysia), which is supposed to be for 20 000 house buyers in the singular precinct underneath an "Pakatan Rakyat" leader regulating the EPF money.
The use of RM1.5bil from the EPF in the intrigue offering home loans to those who cannot qualify for bank financing will be difficult ! to the E PF contributors. The supervision is not defence the EPF's interests again, as this deal cannot safeguard secure monetary earnings for the EPF. But this is not "Pakatan Rakyat"'s concern. "Pakatan Rakyat" is some-more interested in governing body as well as the own survival in the next GE.
There is the large risk in this scheme, as the 3 banks approached by the supervision had refused to accede to the appropriation to these 20,000 house buyers. Why contingency the supervision involve the EPF then? If the supervision wants to hold the responsibility of any default, afterwards justly the supervision should be involved directly to finance this scheme. This is the right approach to safeguard the interests of the EPF.
The EPF is not "Pakatan Rakyat"'s cookie jar. The income belongs to the workers as well as should not be used to achieve the domestic goal. If this is the gift module as claimed by "Pakatan Rakyat" afterwards it is the responsibility of the supervision to support such the plan upon the own.
Not be used as the income cow
Billions of ringgit from The Employees' Provident Fund (EPF) today has been used to rescue failing companies listed upon the Malaysian stock Exchange. Although the EPF is the singular of the greatest pension supports in the world, the workers feel which it should not be used as the income cow to bail out financially troubled Government agencies or companies. "The workers contingency not be left in the dark. Every preference made by the EPF contingency be on top of board. If they can infer which after investing the income in the proper way, they still cannot get great returns, which is fine, we can accept it," commented the comparison bank manager.
But taking the EPF supports for domestic reasons, to bail out failing companies or to lend the income out to "Pakatan Rakyat" associate companies is undeserved. This becomes the domestic bulletin as well as not business. "Pakatan Rakyat"-BN cronies ! as well as their patron domestic select have been essentially feathering their own nests to the impairment of national interests as well as the legitimate owners of which pension fund.
Malaysia Chronicle
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