Almost everyone in Malaysia has an account under the Employee’s Provident Fund (EPF) to save up for retirement or other big purchases in the future, and we often get a percentage of dividends the fund receives every year or so. Now, it looks like the fund could be hitting a big number in the future!
According to The Star, the EPF’s Deputy Chief Executive Officer (CEE) (Strategy) and the fund’s soon-to-be CEO, Tunku Alizakri Alias, announced that the fund expects its assets under management (AUM) to reach RM1 trillion in the next two to five years. Woah!
Source: Edge Prop
The EPF’s AUM reportedly reached RM814.38 billion as of March 31st 2018. Tunku Alizakri noted that the prediction of hitting RM1 trillion came based on the fund’s market performance, contribution growth, and the introduction of new schemes for existing contributors. He also pointed out that this could encourage people in the informal workforce (like freelancers) to open EPF accounts, telling reporters,
“Within the last four years, more emphasis has been placed on social security…It is being talked about by the public. It is now a top priority for the government. A lot of resources (and) focus is now being put on that.”
Source: Kosmo
“For me, this is the right direction. You need to make sure that Malaysians are well taken care of.”
Tunku Alizakri explained that since the retirement fund is expected to hit its highest milestone yet, he added that they could consider exploring the “social good” of the fund. He was quoted by The Edge Markets as saying,
“Maybe our members should start thinking about [whether] the end goal of just getting higher financial dividends [is] the only reason that we should exist. Should we not balance it out with the social good that the fund can go into?”
He added during his presentation at the International Social Security Conference yesterday (9th August) that EPF is concerned about declining mental health, unequal income distribution, and people’s jobs being replaced by automation.
Source: Our Journey | Blogspot
So, what does this mean for account holders, if EPF chooses to put some of their funds into social causes?
Well, it could result in lower dividends being paid out, however, this is just in theory, as the deputy CEO pointed out.
“EPF exists as a fund to provide retirement benefits for its members. Risk return profiles have to be very specific. [We have to look at] which provides the most stable returns, which would be the infrastructure investments.”
He added that EPF is also pushing for a national social welfare blueprint and a coordinating body to help organise social welfare schemes and institutions across Malaysia.
Well, we’re sure the fund will explain everything in full detail once it’s all set in stone!
Hmm…what are your thoughts on EPF’s possible shift in direction? Let us know in the comments below!
Also read: Starting July 1, EPF Members Are Able to Contribute Any Amount Into Their Accounts
