If Socso's funds drop, government will provide aid'
KUALA LUMPUR: Academics have expressed confidence that the government will ensure the sustainability of the Social Security Organisation (Socso) in the face of a nationwide crisis such as the Covid-19 pandemic.
Associate Professor Dr Ahmed Razman Abdul Latiff said while Socso's returns on investment might be affected by fund disbursement to help companies retain or hire workers, Socso would benefit in the long run as the same workers would contribute a sum from their salaries to Socso on a monthly basis.
He voiced confidence that if Socso's funds were to diminish, the government would step in and provide financial support.
"I am sure that the government will ensure the sustainability of Socso so that it will not jeopardise its original goals of protecting the workers and their savings," he told the New Sunday Times.
Yesterday, the Malaysian Trades Union Congress (MTUC) expressed concern that the government's Economic Recovery Plan (Penjana) was dipping into Socso funds to help employers retain and hire workers.
Unveiled on Friday, Penjana will see an additional disbursement of RM5 billion from Socso funds used to provide wage subsidies to employers, including paying up to RM4,000 for those under job training.
MTUC had said this would greatly impact Socso's bottom line and its long- and mid-term ability to provide a social safety net for workers.
Razman hoped the government would provide a more detailed explanation on the matter to allay the concerns raised by MTUC.
"Perhaps MTUC's concern is more on whether Socso can afford to have low financial performance in the next few years due to its involvement in the Prihatin Stimulus Packages and Penjana plans.
"However, I believe the government will always protect Socso's interests and workers, and if a situation warrants Socso to be helped, the government will do the necessary and safeguard the welfare of the workers," said Razman, a Putra Business School lecturer.
On Penjana, he said the government needed to come up with other measures to help businesses gain customers, apart from digitalisation of operations.
He added that as businesses reached wider markets through faster online business transactions, the government would need to consider logistics and supply chain issues.
Sunway University Business School of Economics Professor Dr Yeah Kim Leng said Socso's role and contribution to workers' protection during such challenging times were appreciated.
"Should its funds deplete, the government would have to step in with financial support as both shared the same objective of ensuring social and employment stability."
He added that Socso, especially its Employment Insurance Scheme, would need to gradually build up its funds when the economy returned to normalcy by increasing premiums.
"It is characteristic of insurance schemes to experience sharp claims and payouts during catastrophes and downturns.
"Premiums may need to increase after the current shock."
Yeah said apart from quick and transparent implementation of the Prihatin and Penjana stimulus packages, monthly reporting of their progresses and achievements would be desirable to ensure good governance and instil public confidence.
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