KUALA LUMPUR: Merging the Employees Provident Fund (EPF) and Social Security Organization (Socso) is not a viable course of action, the Malaysian Employers’ Confederation (MEF) said.
A statement today said EPF and Socso were formed for two different purposes.
“The former is set up by the Employee Provident Fund 1991 while the latter is covered by the Workers Social Security Act 1969 and also the Employment Insurance System Act 2017.
“In order to implement this idea, the respective laws have to be changed and legal inconsistencies cleared up. Also, the process of changing the laws will take a lot of time and there are other urgent matters that the government needs to prioritize,” said MEF President Datuk Dr. Syed Hussain Syed Husman in a statement.
A recent news item surfaced a proposal to merge the two organizations to meet the needs of Malaysia’s aging population.
Syed Hussain argued that combining these two entities into one creates a system in which both functions are intertwined and overlapping.
“It requires a strong commitment from everyone involved, as a merger could have a knock-on effect on other sectors. What will happen to the EPF and Socso workers? Some of their jobs may overlap.
“So, will cuts for EPF and Socso workers be on the table?” he asked.
Syed Hussain also highlighted the huge disparities in the number of contributors and employers involved in these two institutions, and merging them into one entity will result in greater financial risk and payout.
“Moreover, the EPF contribution is mandatory for local employees, while Socso is mandatory for both local and expatriate employees.
“EPF focuses on savings and retirement, while Socso, on the other hand, has a broader role including accidents and injuries, job loss, job seekers, placement, and upskilling and reskilling,” he said.
Syed Hussain said integrating pension, savings, annuity and social protection mechanisms does not solve the problem that the value of pensions and savings decreases over the years.
He added that MEF believes it is more important for the government to identify an efficient and effective mechanism that conforms to standardized procedures to protect the interests of investing members, such as effective management of fund investments and access to funds Contributors to regularly monitor the performance of the funds invested versus the payout. -Bernama
https://www.thesundaily.my/local/epf-socso-merger-not-feasible-mef-MF10738510 EPF Socso merger not feasible: MEF