Umno members of Parliament (MP) today defended the extraordinarily low five percent dividend yield by the Employees Provident Fund (EPF) for the year 2001.

PRM president Dr Syed Husin Ali had earlier issued a statement calling on Parliament to set up an investigative committee to look into EPFs management and administration, including its loans to companies in dire straits.

Speaking to malaysiakini in the Parliament lobby today, Robert Lau Hoi Chew (BN-Sibu) stated that it was a policy decision which the government had to make.

Look at the companies in South Korea. Because they chose to borrow money from the International Monetary Fund (IMF), the Daewoo conglomerate is now owned by Americans. Prime Minister Dr Mahathir Mohamad made the right choice by using our own resources [including the EPF] instead of IMF to rescue troubled companies.

Dr Mahathirs principle of self reliance was the right policy decision, said Lau.

However, he suggested that EPF officers should be made accountable to Parliament by giving mandatory periodic briefings and detailing their investment programmes.

Thats probably the best that we could do, he added.

Public Accounts Committee

However, Ahmad Zahid Hamidi (BN-Bagan Datok) did not see a need for a special committee and expressed that the Public Accounts Committee in Parliament could look into the matter.

The committee is appointed by the Dewan Rakyat at the beginning of each session and comprises of members drawn from the major political parties in the Parliament. Its main objective is to ensure that there is a proper accountability of funds by public officials.

It examines reports of the auditor-general on instances of excessive and inappropriate spending as well as whether programmes are achieving their objectives and government spending is getting 'value-for-money'.

Zahid added: Moreover, EPFs reason for the low dividend (the economic downturn) is acceptable. It is a known fact and no organisation has been able to give a better return. For example, EPFs return is so much higher than that of Tabung Haji.

Tabung Hajis returns since 1994 has topped those of EPF until 2000, after which it started sinking, reaching a record low last year at 3.25 percent.

However, another MP from the ruling front, Mah Siew Keong (Gerakan-Teluk Intan), did not agree with Zahids opinion.

Extremely disappointing

The five percent dividend is far too low and extremely disappointing. Its equivalent to the fixed deposit rate!

I would suggest that EPF set up the highest level committee to look into this. The EPF is supposedly run by experts, so contributors have a right to be unhappy (with the dismal performance), Mah told malaysiakini .

Mah added that Parliament should have a role as a watchdog in the investment policies of EPF as it is the largest fund in the country.

Dr Syed Azman Syed Ahmad Nawawi (PAS-Kuala Terengganu) expressed his hope that the EPF would be more transparent, considering its reputation for bailing out companies.

We agree with what PRM has said, and would call for a committee to investigate into the matter, he told malaysiakini .

EPFs dividend for 2001 was the lowest in the last 38 years. Its announcement was met with widespread criticism and allegations that the fund was being used predominantly to rescue troubled companies.