KUALA LUMPUR, Aug 8 2016 : The Employees Provident Fund (EPF) is looking at an additional allocation of between RM20 billion to RM30 billion annually for its Simpanan Shariah from 2018.
Chief Executive Officer Datuk Shahril Ridza Ridzuan said the retirement fund had started the registration process for its members to convert their conventional EPF savings to shariah-compliant savings.
“The additional allocation depends on the availability of assets to invest. But, generally speaking, we look at the trend in growth of shariah assets in Malaysia and can probably expect to allocate between RM20 billion to RM30 billion annually,” he told reporters at the retirement saving fund’s headquarters here today.
Simpanan Shariah, the new retirement savings option, will be launched in January 2017.
A fund size of RM100 billion has been allocated for the Simpanan Shariah 2017 and is based on a first come, first served basis.
“From the aspect of asset allocation, it is the same with the existing conventional fund. The shariah fund will focus on capital stabilisation and to achieve our goal of a return of two per cent above inflation,” said Shahril Ridza.
As of 8.30 am today, 5,000 members has applied to convert their conventional EPF savings to Simpanan Shariah at 68 branches nationwide.
“Members are reminded that the registration is continuous, but to meet the cut-off of 2017, you have to do so by at least Dec 23, and subject to having sufficient allocation available,” noted Shahril Ridza.
Meanwhile, he said the EPF’s recent move to allow its member to opt to invest in unit trust funds that are 100 per cent invested overseas, is to provide opportunities for asset diversification for them.
“It is still very new. We won’t see that much of a take-up at this point in time. However, the unit trust industry is also readjusting its portfolio offering and we expect this to pick-up in time,” he added
Effective Aug 1, the EPF has allowed its members to invest in unit trust funds that are fully focuses on investing overseas.
Prior to this, the EPF only allowed investments in unit trust funds with no more than 30 per cent foreign exposure.
As of December 2015, the EPF had a total of 14.55 million members, of whom, 6.79 million are active.
On the outlook for 2016, the EPF expects the yield environment to be extremely low, following the weaker global economic environment and returns for most funds are likely to be challenging.
“We will be transparent and our main target (of returns), is inflation plus two per cent. That remains our core focus this year,” said Shahril Ridza. – Bernama