Groups: Credit EPF savings to banks, not personal accounts
12/09/2007 The Star

KUALA LUMPUR: Several organisations want the monthly withdrawals from the EPF Account 2 to be credited to the financial institution from which the housing loan was taken instead of to the contributor's personal account.

Real Estate and Housing Developers Association (Rehda) president Ng Seing Liong said Rehda preferred that the savings be credited direct to the financial institution.

“It shouldn’t go to their (EPF contributor’s) personal accounts. It defeats the purpose. It will be subject to abuse and the money will not be used properly,” he said yesterday.

He was responding to Second Finance Minister Tan Sri Nor Mohamed Yakcop’s statement that the monthly withdrawal from Account 2 would be credited direct to EPF contributors’ personal accounts from January.

House Buyers Association vice-president Brig-Gen (Rtd) Datuk Goh Seng Toh echoed the call, saying “we have our worries.”

“Eventually, contributors will suffer if they would have used the money wrongly. When they see additional money in their individual accounts they will tend to spend it. It is safer to credit it into the housing loan account,” he pointed out.

Goh said that although the Government’s budget move was well intentioned, there must be safeguards.

“It (the monthly withdrawals) shouldn’t be credited into individual accounts, because they (housebuyers) risk defaulting on their bank loans and exhausting their EPF savings, and have their properties auctioned off by the bank.

Goh also wanted the plan to be offered only for completed housing projects so that EPF contributors would not be left stranded with abandoned projects.

Cuepacs president Omar Osman also expressed concern over the withdrawal plan as proposed.

“It is better for the money to be credited to the housing account. The best mechanism should be thought of to ensure that the money is used to pay for the house,” he said.

MTUC president Syed Shahir Syed Mohamud strongly opposed the move, saying the it was against the principles of saving for old age.

“What’s even more alarming and unfortunate is that the savings from Account 2 will be credited to the EPF contributors’ personal account,” he added.

Fomca secretary-general Muhammad Shaani Abdullah said the EPF savings should not be used to pay housing instalments.

“It is not good in the long run. We should save more rather than spend our savings,” he added.