Sunday, March 15, 2009

Malaysian EPF is such a flunky!

See what you get when you don't have competent people managing your citizens' pension funds. A crummy 4.5% return for 2008. The Malaysian unionists are furious.

"It is a lame excuse to state that the global economic slowdown has reduced the profits of the fund” Solomon, Malaysian National Union of Bank Employees (NUBE) Secretary-General
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Yeah man what kind of lame excuse is that blaming low returns on the global economic slowdown. The unionists want investment advisers to be changed for performing so poorly. It is unconscionable the EPF took part in all sorts of bailouts that resulted in lower than normal returns for EPF stakeholders who are workers who need the return to be able retire when they are old. If EPF investments does not perform better that this pathetic 4.5%, Malaysian workers may have to work an extra 6 months from their current retirement age of 55.
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EPF Returns [Link]
1983 to 1987 -8.5%
1988 to 1994 -8.0%
1995 - 7.5%
1996 -7.7%
1997 to 1998 - 6.7%
1999 - 6.84%
2000 - 6.00%
2001 - 5.00%
2002 - 4.25%
2003 - 4.50%
2004 - 4.75%
2005 - 5.00%
2006 - 5.15%
2007 - 5.80%

If I were a Malaysian, I too would be outraged. 4.5% is indeed low relative to their historic performance. Malaysia should learn from Singapore on how our CPF is managed - you don't hear our union leaders complaining about the returns CPF gives out. In fact our union leader encourages more Singaporeans to transfer and lock their money in the CPF Special Account so they won't be able to touch it for decades. Given the problems with the low returns on EPF, it looks like Malaysians have plenty to learn from our leaders.
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Unions see no reason for low EPF dividends
Maria J.Dass and Humayun Kabir

PETALING JAYA (March 15, 2009): The unusally low dividend of 4.5% expected to be declared by the Employees Provident Fund (EPF) has incurred the wrath of worker unions in the country.
"EPF is a cash rich entity. There is something wrong if there are no reasonable and acceptable dividends being paid out to workers," said National Union of Bank Employees (Nube) secretary-general J.Solomon.
"This has been going on for years.... where money from EPF have been used to fund government projects and to bail out ailing companies which later rake in huge profits with CEO and managements enjoying fat bonuses of between 20 to 30 months," he said.
Solomon"But what about the poor workers in the private sector whose money were used for these bailouts, what are they getting?" he asked, adding that their civil service counterparts are getting a better deal with Cost of Living Allowances (COLA) and other perks.
"We have also, time and agains, questioned EPF's investment decisions in certain companies. The scrutiny of the EPF board of directors is questionable as the majority of its members are government officers and there are only a few workers' representatives."
A.SivananthanMalaysian Trade Union Congress (MTUC) executive council member A.Sivananthan said the economic downturn "is not a good enough excuse for paying low dividends because the global downturn only struck in late 2008".
Sivananthan felt a dividend of no less than 5% would be a fair, while Solomon said a dividend of about 8% to 10% would be payable to workers "if all the leakages are plugged."
In IPOH, Deputy Finance Minister Datuk Kong Cho Ha said the public should not speculate on the EPF dividend for 2008 but wait for the official announcement.
"EPF's dividend rate is always higher than the bank rates. The dividend rate may fluctuate due to the domestic market as EPF has invested in a lot of government treasury bills." he told reporters after officiating at a Perak MCA Wanita's presentation of a talk titled "Your fate is written on your face" at the state MCA headquarters here.

30 comments:

skeptic said...

(sacarstic)
Those malaysians are so lazy.. Retire at 55. Don't they know that our Lee Kuan Yew said that retirement=death.

That is why he is still working unlike that lazy Mahatir.

Old Singaporeans are more hard working..in McDonalds, cleaning toilets and picking trash.

Unlike those weak and lazy Malaysian who think that old people should enjoy their lives after decades of hard work.

Anonymous said...

I think we should re-join Malaysia. Seems like the lesser mortals up-north get a better deal than lesser mortals in Singapore. Who gives a deal about the quarrel between one old naked emperor and his old-time northern neighbours.

Ghost said...

They actually post their returns? ...shaking my head

Anonymous said...

some more our northern brethren are paid less, and deliver more returns...

man, can i opt for my cpf money to be managed by epf???

Anonymous said...

And Lim Swee Say said that he felt rich looking at his Monthly CPF Statement. Perhaps they are special rates for the Lee Suckers and Cronies that ordinary Singaporeans don't enjoy.
And what's the watered down rate that the ordinary Singaporeans get? 2.5 percent? :-)

Anonymous said...

ONLY 4.5%?? Hahahaha, our Singapore's GIC did 10x better last year with 41% returns.

Oh wait, that's 41% in brackets...

rookielim said...

"It is unconscionable the EPF took part in all sorts of bailouts that resulted in lower than normal returns for EPF stakeholders..."

At least they are using the money to bailout Malaysian companies albeit that the companies may be linked to the politicians; whereas our CPF money are used to "bailout" USA companies. Sigh!

Anonymous said...

The more I learn about M'sia, the more I admire them.

Anonymous said...

The wheel of fortune is turning. We have been too over confident and arrogant. Some day, it will be our neighbours turn to look down on the little red dot. Just see.

garment wearer said...

Yes, they have plenty to learn from Singapore's gahmen and minsters indeed.

Why are they subsidizing healthcare rates to such a ridiculous extend? For a heart bypass surgery, the price difference between a gahmen hospital and private hospital is RM29,500! Why bother?

WHy are they stopping foreign workers from going into Malaysia to look for jobs so that more of their people will find employment?

Why not learn from Singapore - high costs of healthcare generate higher income - the poor can rot in their homes. The poor can starve to death, as long as foreigner workers pay rent here, buy food here, simply spend here!

Our CPF returns are so high.. and useful... I dont know how I am going to be able to spend it all in future! Even playing golf daily or retiring in Bora Bora would be too paltry compared to my CPF returns!

taishan said...

Anon 1:05 PM

Don't get too excited.
The more you learn the more you'll find it's the same.
Most things are a mirage.

Anonymous said...

Pl it is not true that politicains up north are better,far fr it,they do make more peanuts,only they carry the heavy burden of "corrupted fells"whiolst our are Mr/Mrs CLEAN all the way.

It is not true that they are nice and do jmore for their people,far fr it,they do admire the legalised peanuts that PAP receiv and the billions tyhat Sinkies entrust PAP to gamble and thus gain Ang MMoh respect.

The only difference is that they have a strong people,it is almost 51% vs 49%,so when they tried to introduce GST,the noises and protest made them changed their minds almost immediately.

In red dot it is 33.3% vs 66.7% and probably going up,in PAP favour.

All politicans are necessary idiots in this world,only a proper system of checks and balances would ensure the future of any nation.

Anonymous said...

Blame on yourselves Singapore! We talk and talk about change, but when its time to vote... all scared like mouse, and want "more of the same"... After that talk and talk again of change for another 5-6 years.

Anonymous said...

Could it be a lot of people can't vote because of the walkover? If all the citizens can vote, the results may not be skewed towards just one party.

Onlooker said...

What Mud land EPF have no "Long term Investment"?
IE withdrawal never get higher and higher until ... 85 yr old leh.

Same-man said...

Well, malaysians see Singapore very good, while singaporeans see Malaysia very good.

One chinese saying is well said, "the moon in other places are always more round."

In fact, both countries are the same. Each with its pros and cons.

If u like malaysia so much, will you like to live in a country where you can easily bribe a policeman RM30 to avoid speeding fine, find crime occur almost everywhere and government siding with one particular race?

......

Anonymous said...

FYI, the government in Singapore sided with the foreign talents and any family members related to Lee & Lee, and their cronies.
I don't mind bribing cops. But please enjoy your NS and reservists, oh, of course, IPPT RT as well.

When it's time to retire, you can be assured (by your multi-talent ministers) that you will end up in the same place where you need to bribe cops.

Anonymous said...

Hey Mr. Tan

I've been following your blog for years + your distinctive, funny writing on Sammyboy.

I'd like to write to you by email. Do you have some anon. email address where I can reach u? I will be also using anon. email.

Wang said...

Lucky,

Please do go ahead and invest in Malaysia.
For those people there , inflation has eaten into whatever return.
In most cases, you seem to look only at absolute returns and not the net returns.

You seem to forget the thousands of people who were literally put out of joint by the CLOB issue.
You may dislike the local policies of the day. But most people are wary of investment, due to the prior retrospective legislation.

Anonymous said...

Wang,
Pls do not create pseudo arguments by mixing up seperate issues.

Your case is simply that inflation is higher in Malaysia. Do you think that over the last 10 years, Malaysia's greater inflation than Singapore compensates for the difference in interest rates? Are u sure their long term inflation is significantly higher?

LuckySingaporean said...

Wang,

I did not encourage or discourage anyone to invest in malaysia. That is not the point of the article. The main point is that EPF money is put in the hands of professionals who are expected to best manage it for the retirement of Malaysians - whereas in Singapore, CPF earns a fixed low rate....no debate on whether that rate of return is sufficient for retirement.

As for CLOB, it was an invention of Singapore brokerages and stock exchange to set it up so they can continue to earn commissions from this highly traded syndicate controlled stocks - without regard to the investors who were lured into these investments- when the Malaysians split away their bourse. The malaysians did not create clob. It was destroyed by the currency controls Dr. M put in place to combat currency speculators. The Clob was a secondary market created for the benefit our Singapore brokerages at the expense of small investors.

Taishan said...

Lucky,

EPF is supposed to be run professionally. It is not. See the 5B RM put into ValueCap recently and all the National Service projects it has undertaken. That it earns better nett margins 2008 than 2007 but giving out lower dividends throws up an anomaly.
Still CPF is no cheer. But at the least they lent out to HDB which loans at a lower interest for their astronomical prices.
Housing loans in Malaysia are just exorbitant.

Wang said...

Lucky

There are 3 separate risk factors.

As you are aware, higher risk demands higher returns.

Likewise to me Anon,, you are giving pseudo arguments.

Frankly, any Malaysian I am aware who is financially savvy, would rather hold Singapore or any other hard currency dollars than RM$ who are aware of their net returns.

When you mix up issues fine,

When I point out the higher risk profile, which results in such demanded returns for Malaysia as seen by EPF but which is not even as good given to ASN shares which applies only to bumiputras (Malays) of almost double the rates, you than seem to attack not the argument but the particpant.

Anon, so please spare me your platitudes.

Anonymous said...

lol... Wang!

There are many good reasons why in gneral, a retirement scheme should be in a country's original currency, I assume i dun have to explain. =)

What is important for such a scheme is that the interest should be higher than inflation (within the country). Agree? =)

You have converted lucky's argument into one where Singaporeans should make long term investments in Malaysia at 4% interest. Which is not his point.

I agree that it is a stupid idea to do so because u can get much better returns here, without currency risk.

You assert that Malaysia's EPF is a ripoff. I agree. But Lucky's point is even such a rip-off is better than our CPF.

seany said...

EPF 4.5% vs CPF 2.5%, i guess its clear enough that our pappies are ripping us off and laughing their way to the bank.

Anonymous said...

To anon 1:05 PM

That is why i am now working in Malaysia. I may consider applying for Malaysia my second home scheme. Have a holiday house in the east coast of malaysia. But don't worry, should the PAP regime turn its guns against the citizens of singapore, i will come back to fight. I will.

Anonymous said...

To anon 10: 05 PM

'If u like malaysia so much, will you like to live in a country where you can easily bribe a policeman RM30 to avoid speeding fine, find crime occur almost everywhere and government siding with one particular race?'

Hey, I have been in Malaysia for a long time. This country is not about brides and crimes. Its what the ST tells you and blows it up. This country is about taking care of the individuals and is about the voice of the individuals. I find that there is more democracy here and that the people are nicer and more generous. It is a nice country to live in. so there! be brainwash and live like a frog in the well. Go on froggy.

Anonymous said...

Hey Lucky, guess this is the wrong place to post this but check out today' "Today". Apprently our MM was a "business translator" for the Japanese during the 40's. Guess many did not know the Japanese were busy doing other businesses in Singapore besides war. I am amazed at how much history I can learn from our national papers.

Wang said...

ROFLMAO Anon/Lucky

I disagreed with Lucky is because he expects pao chiak and pao tan and high returns all in one go.
He also choose the example of Malaysia (which does not have the same risk profile), if he had chosen Norway, Sweden or Japan or even the super funds of Australia, with similiar profiles fine. However, considering most self funded are now deeply in the red in OZ, i think that would defeat his analogy.
Some may have the luck of the draw, but unfortunately as seen recently, once a black swan event hits, it is anybodies guess.
CPF has allowed now individuals to in invest, so if you think you are better, pls go ahead.


Regards
Wang

Anonymous said...

i am over 35 years old and never able to vote cos of walkovers. I want higher return for our CPF, lower housing price, lower utilities, lower transport costs, better job security, better social welfare. Whi can I speak to?