PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) said their bosses were not in favor of the proposal to increase employers’ contributions to the Employee Provident Fund (EPF).
Its president, Tan Sri So Thian Lai, said that mandating all employers to provide high contribution rates is especially harmful to small and medium enterprises (SMEs), which make up 97% of businesses. said.
“FMM does not support calls for employers to increase EPF contributions as a means of increasing employee retirement savings, especially in the current difficult economic climate where the outlook is uncertain and global economic growth remains fragile. , yes,” he said in a statement. Tuesday (May 2nd).
Soh added that the industry expects sales to slow down both domestically and internationally in the first six months of the year, according to a survey conducted by FMM among 745 respondents across the country. .
“The industry believes that the government’s focus at this time should be on short-term and immediate initiatives to help workers pocket more money and improve Rakyat’s purchasing power amid ongoing price pressures. I think it affects everyone.
“The government’s focus is on keeping Rakyat’s costs and living standards manageable and ensuring a positive economic growth trajectory that provides an environment conducive for businesses to increase profits and improve cash flow. Yes, it will allow us to: We need to improve wages and benefits for our employees.”
Under the current EPF contribution schedule, employer contributions are 13% for earnings below RM5,000 and 12% for earnings above RM5,000.
Mr Soh further said the monetary value of employer contributions has not remained stagnant, but has increased each year based on wage adjustments accompanying changes in the consumer price index.
Employers have a fixed statutory contribution rate, but employers may choose a higher percentage, up to 19% of an employee’s salary, to be tax deductible based on their respective human resource and talent retention strategies. There was also a discretion to contribute at
“Additionally, with EPF’s strong governance structure and continued prudent and superior investment practices that have generated higher returns, we believe EPF will continue to strengthen and enrich the retirement savings of its members.”
He added that the current state of deductions and contributions to EPF members’ retirement savings is also sound in meeting future needs.
Soh added that any proposal or policy change that has a direct cost impact on the business should be made in full consultation with all stakeholders.
On Monday (1 May), Prime Minister Datuk Seri Anwar Ibrahim said workers’ appeals to employers contributing 20 percent to the EPF would be taken to the Cabinet for discussion.
Employees currently contribute 11% of their monthly salary to the EPF, while employers contribute 12% or 13% depending on the legal contribution rate.
