The human resources minister recently announced that his ministry is contemplating an increase in the employer-employee monthly contributions to the social security organisation, Socso.
The only reason for such a consideration is that Socso contributions have remained stagnant since 1971.
At the onset, we wish to emphasise that any increase in the employer-employee Socso contributions ought to be on a needs-based consideration and not on the argument that such an increase is “overdue”.
If that logic is to be applied equitably, then even the employer-employee Employee Provident Fund contributions need to be revisited as EPF rates have remained stagnant for a long time!
Unlike the Sosco scheme, the EPF remains the only post-retirement savings available for working-class citizens. And the reality is that the vast majority of them do not have adequate EPF savings for their retirement – a fact that none other than the EPF has admitted.
Whilst the EPF is the only source of post-retirement savings, Socso schemes provide for employment-related contingencies. That in itself is commendable.
But the question that needs to be raised is whether any increase in the employer-employee Socso contributions will bring about enhanced social security benefits to workers, such as an enhancement of benefits for invalidity pensions, temporary disablement benefits, and payments under the employment insurance scheme.
Unlike the EPF, where returns on investments are paid out as dividends to its contributors, Socso returns on investment are parked in its financial portfolio. From what we understand, Socso is not confronted with a threat of defaulting on its obligations to its contributors, given its current solvent balance sheet.
Unless and until the minister presents a comprehensive set of objective improvements to the existing schemes of benefits under the Social Security Act, 1969, we would not support any increases in workers’ Socso contributions. – Penang MTUC
K Veeriah is secretary of the Penang division of the Malaysian Trades Union Congress