Guarantee savings against losses, says Fomca
WEDNESDAY, JULY 25, 2012 - 12:39
Location:
PETALING JAYA
Selvaraj: Calls for greater awareness campaign on PRS
THE Private Retirement Scheme's (PRS) offering of Syariah-compliant product range does not guarantee the contributor's savings is protected against losses.
Federation of Malaysian Consumers Assocation (Fomca) deputy president Muhammad Sha'ani Abdullah said protection must be guaranteed if the government wants to provide such a scheme.
"Any form of savings must be guaranteed by the government against any losses. High returns, coupled with high risks, is not the objective of such retirement schemes,"
"Enticing investors or contributors by offering high returns, you're exposing them to future losses and denying them the benefits during old age. We cannot use syariah-compliance to justify or guarantee this." said Muhammad Sha'ani.
He pointed out that even religious organisations have absconded with public funds and there was a time when Bank Islam had to be "rescued".
"No savings should be put under such fund managers where the risks are higher.
"The government must ensure the security of the savings before actually promoting such alternative providence scheme.
"Since the government is proposing it, they must provide the means for protection," he said. Muslim Consumers Association of Malaysia chief activist Datuk Nadzim Johan, however, was excited with PRS new product range, pointing out that the current Employees' Provident Fund (EPF) contributors have limited scope to ensure the money was being used in the manner of their choosing.
"There is an opening there, before this there was complaints that some funds taken by EPF are not syariah-compliance. We welcome the idea," said Nadzim.
Nadzim said he has doubts whether the offering would be syariah-compliance in both form and spirit or merely in form alone.
"On syariah-compliance, there are many schools of thought. Thus, we are afraid it may just be in form but not in spirit," he said.
Fomca chief executive officer Datuk Paul Selvaraj in the meantime calls for a greater awareness campaign on PRS following complaints that consumers and potential contributors are still in the dark regarding the scheme and its benefits.
"We should educate consumers on this because young executives are not prepared for retirement.
"People want to know. There should be more information passed on to prepare people for retirement."
Federation of Malaysian Consumers Assocation (Fomca) deputy president Muhammad Sha'ani Abdullah said protection must be guaranteed if the government wants to provide such a scheme.
"Any form of savings must be guaranteed by the government against any losses. High returns, coupled with high risks, is not the objective of such retirement schemes,"
"Enticing investors or contributors by offering high returns, you're exposing them to future losses and denying them the benefits during old age. We cannot use syariah-compliance to justify or guarantee this." said Muhammad Sha'ani.
He pointed out that even religious organisations have absconded with public funds and there was a time when Bank Islam had to be "rescued".
"No savings should be put under such fund managers where the risks are higher.
"The government must ensure the security of the savings before actually promoting such alternative providence scheme.
"Since the government is proposing it, they must provide the means for protection," he said. Muslim Consumers Association of Malaysia chief activist Datuk Nadzim Johan, however, was excited with PRS new product range, pointing out that the current Employees' Provident Fund (EPF) contributors have limited scope to ensure the money was being used in the manner of their choosing.
"There is an opening there, before this there was complaints that some funds taken by EPF are not syariah-compliance. We welcome the idea," said Nadzim.
Nadzim said he has doubts whether the offering would be syariah-compliance in both form and spirit or merely in form alone.
"On syariah-compliance, there are many schools of thought. Thus, we are afraid it may just be in form but not in spirit," he said.
Fomca chief executive officer Datuk Paul Selvaraj in the meantime calls for a greater awareness campaign on PRS following complaints that consumers and potential contributors are still in the dark regarding the scheme and its benefits.
"We should educate consumers on this because young executives are not prepared for retirement.
"People want to know. There should be more information passed on to prepare people for retirement."
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