Should EPF Run the EPF CI Scheme?

An article by Toh Lye Huat on EPF CI scheme appears in the latest issue of The Edge. Some key points are:

• EPF CI scheme was delayed because of MTUC having some reservations.
• Original target launch date was 1 June 2008.
• The main problem is believed to be MTUC preferring EPF to run the scheme itself.
• Previously EPF annuity scheme also was objected by MTUC.
• Toh questioned whether EPF has the expertise to run the EPF CI scheme.
• Citing RHB Bank, EPF also leaves the running of the bank to the management.
• For the scheme to be successful, intermediaries especially agents need to market and distribute the product, distribution is not EPF's role. If EPF outsources the distribution role or increases its manpower, the cost of doing business will be raised.
• EPF CI scheme is likely to be offered at cheaper rates given the huge volume involved and the risk pooling concept.
• The delay in the scheme has deprived the EPF members the opportunity in obtaining CI protection at an affordable cost.
• Participation is voluntary, those who think it is expensive need not sign up.
• Insurance companies and their agents play the role in explaining the terms and conditions of the cover.

Source: The Edge Malaysia, Issue 715, 11 - 17 August 2008.