There is a debate ongoing via the opinions written in the online media these last few weeks, all fiery nouns and burly adjectives on who actually owns the EPF funds, what its actual use is supposed to be for and if withdrawing it for debt settlement is kosher.
The suggestion to allow EPF withdrawals for debt settlement came at the footsteps of reports of increasing household debts which continue to burdens Malaysians, pushing many to the brink of insolvency if not straight into bankruptcy.
As of now, reports noted that household debts account for over 80 per cent of the GDP and credit card use as well as illegal borrowings from loan sharks and short-term loans from banks are increasing by the year.
Some quarters have called for the retirement saving scheme to allow more withdrawals to allow debt-ridden depositors to clear some of their debts.
This received brickbats from those who believe that EPF's sole function is to be the safety net for retirement purposes and should not be squandered away lest we be destitute in our then not so golden years.
There is perhaps some credence to this as recent reports have highlighted how many Malaysians straddled with debts find only poverty in retirement as they either lack savings of have them wiped out by debts.
But be that as it may, being declared bankrupt will probably damage one's ability to survive during retirement more than having less EPF balance.
And more importantly as argued by those against disallowing EPF withdrawals for anything including debt settlement, is that in the final analysis, EPF fund should actually belong to the depositors and is not demesne of the agency nor the government.
These more liberal views with EPF monies and opposed to any austerity-like measure on the retirement fund believe that as it is the depositor's money, they should not only be able to use it to pay for debts or other expenses, but also to remove it in entirety.
The argument is that EPF may actually be shortchanging depositors with low dividends anyhow and contributors should have the choice to take their money out and put it in higher yielding private sector-managed investment funds or portfolios.
This can lead to spendthrift behaviour but may also teach many more cogent financial discipline and even let them increase investment yields from the money which is their own anyway.
But whichever side of the argument you take, the important thing to perhaps look at is not really depositor investing, debt load or spending behaviour but perhaps at the policies of the EPF in what they do with the contributor's money which they oversee.
The operative words here are "contributor's money" and "oversee".
My personal fear and concern is that while national oil firm Petronas has always been the cow that is milked by the government day-in and day-out, EPF has been treated like the government's private petty cash.
Indeed the retirement savings scheme has been the fall guy, as the institutional buyer that will step in to underwrite.
I know that underwriting stocks offerings is supposed to be a banking function, but in Malaysia there is almost no risk borne by underwriting banks as there will always be institutional buyers like the EPF that will buy massive chunks of IPOs.
Case in point was the Felda Global Venture or FGV IPO.
In this way, it is funds like EPF that actually bear the risks as the banks, financial consultants along for the ride and companies aligned to the powers that be that make quick profits.
When stocks like FGV saw their prices fall because of weak fundamentals, it is the EPF and others that will be left holding the bag, as they will be holding below par value paper for the cash they already paid out at a higher price.
In a way this is similar to what some say is the US government 'raid' on federal pension funds by borrowing monies from it to avoid default by circumventing breaking the debt ceiling and at the same time cutting pension benefits.
A concern that is not only seen in today's Obama Administration but also under previous presidents. Indeed if I am not mistaken our own government has borrowed from the EPF too, for purposes vague and unspecified.
Such is the danger to EPF contributors as their money has seen such wheeling and dealing that enriches others and may leave them all the poorer without their say so.
Worrisome enough perhaps to see a paraphrasing of the American Revolutionary war cry of "no taxation without representation", as "no EPF investment without representation" by labour unions since late last year.
Indeed as for all these arguments go perhaps it is better for EPF funds to be withdrawn by depositors to pay for their own debts than it to be used willy-nilly by the powers that be as if it is their father's trust fund to bail out cronies or some such.
Or as the northerner in me would remark in a more colourful way, "Suka hati la apa aku nak buat dengan duit aku. Bukannya duit bapak hang kan?”
In the end it is perhaps better to put one's own money in one's own hand rather than let hypocrites talk about enforcing savings when it is they who are dipping into the honey pot so to speak.
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