Former Prime Minister Najib suggested that KWSP introduce a multi-level dividend structure so that members with lower deposits can get higher dividends.
To help the people tide over the epidemic, the government has launched three provident fund withdrawal plans in the past year, namely i-Citra, i-Sinar, and i-Lestari. These three withdrawal plans resulted in 3.6 million members with deposits of less than RM1,000.
To solve the problem of insufficient member deposits, former Prime Minister Najib Razak suggested three ways to restore the people’s provident fund deposits. The first method is the process by the government that gives the Provident Fund Board a more generous return so that the Provident Fund Board can distribute higher dividends to members.
The second way is for the government to increase the monthly payment rate of employers and employees. The third method is to change the dividend payment structure and use a multi-level dividend structure to allow members with lower deposits to obtain higher dividends.
The so-called multi-level dividend structure means that members with fewer deposits can get higher dividends, while members with more deposits can get a lower dividend.
However, financial experts do not recommend that the Provident Fund Board implement a multi-level dividend structure, because this is a disguised form of taking the rich and helping the poor. Members with a lot of deposits also use their labor to accumulate wealth, which is very unfair to members with a lot of deposits.
If the Provident Fund Board implements a multi-level dividend structure, this may cause members to choose to withdraw funds.
