Housing loan scheme won’t affect EPF earnings
08/09/2007 The Star By SIM LEOI LEOI

PUTRAJAYA: The freeing of RM9.6bil in Employees Provident Fund contributions to pay for the purchase of homes by the public will not affect the earnings of the body.

Second Finance Minister Tan Sri Nor Mohamed Yakcop also put paid to fears that this mechanism to make it easier for every Malaysian to own a home would lead to those retiring not having enough funds to cover their expenses in the future.

"The purchase of a home is a good form of investment and not consumption.

"The buying of homes should not be put off by people until they retire. This is because the prices of homes would have appreciated so that by then, these would be too expensive.

"Housing is the one thing we want all Malaysians to have," he told reporters in a briefing on the Budget tabled by Prime Minister Datuk Seri Abdullah Ahmad Badawi in Parliament on Friday.

Nor Mohamed said EPF had indicated that it was very happy to assist with the Government’s announcement to let contributors use the amount in Account 2 to offset or pay their housing loans.

This means that a working person with a salary of RM2,000 can use the RM138 estimated to be the monthly contribution to Account II to offset the housing instalment.

"This mechanism will enable a lot of people in the lower and middle income group to own their own or even second homes," said Nor Mohamed.

EPF posted a gross investment income of RM13.3bil in 2006 and an asset size of around RM290.2bil, with around 11.4 million members. It also recorded total contributions RM26.2bil.