Things are no different in the public sector. Across the US, many state governments, e.g. California, New Jersey and Illinois are going broke trying to meet pension payments. To raise funds, governments either have to raise taxes, or reduce employee benefits like healthcare and retirement benefits. It is the taxpayers who invariably ends up getting a raw deal.
Last year 3.2 million baby boomers in the US became the first batch of retirees eligible for social security (retirement) benefits. This figure will rise when 77 million baby-boomers are expected to retire within the next five to seven years. Not only will there be 77 million fewer workers to contribute taxes, but there will be 77 million new retirees expecting monthly checks from the government. The numbers boggle the mind, and this is only the beginning. More and more countries will be facing the same predicament as their population ages.
In 2005, multinational companies across the globe were already aware of the impending crisis that retirement benefits would bring on. A similar situation can be expected here in Malaysia although things haven’t quite reached such dire proportions yet. We should keep a watchful eye on our retirement funds in the EPF and keep track of the government’s investments through Khazanah Nasional Berhad.
Temasek Holdings, the Singapore government’s investment arm has a website that not only lists all the companies in their investment portfolio, but also allows the public to view the group’s financial statements and balance sheets. However, what was not disclosed in the website was the massive loss of S$58 billion (US$39.91 billion) from the end of March 2008 to November 2008. Unfortunately, there is even less transparency with regards to Khazanah’s investments. Only percentages are given, not the absolute figures. There’s also no access to the group’s financial documents.
Fortunately for us, the alternative media are doing an excellent job as the people's eyes and ears. It's up to us to be vigilant about how the government spends our money. We don't want to wake up one day and find that our retirement funds have lost 70% of its value because the government has been dipping into our EPF savings to bail-out sick companies that they had invested in in the first place with taxpayers' money. We simply cannot remain passive bystanders when our retirement benefits are at stake.