KUALA LUMPUR – The Employees Provident Fund’s (EPF) total investment income grew 25% year-on-year to RM34.05 billion in the first half (1H) of 2021.
Total gross investment income for the second quarter (Q2), however, is lower at RM14.77 billion against the RM15.12 billion recorded a year ago.
Chief executive Datuk Seri Amir Hamzah Azizan said the retirement fund delivered a resilient performance in 1H, driven by the progressive recovery of equity markets and most asset classes amid the global rebound.
“Equities continued to be the main contributor of income for Q2 2021 at RM7.89 billion, accounting for 53% of total gross investment income,” he said in a statement today.
During the quarter, a total of RM0.21 billion was written down for listed equities compared with RM1.66 billion a year ago, following the continued recovery across global markets. The cost write-downs are part of the fund’s internal policy to ensure a healthy portfolio.
EPF said after netting off these write-downs, it recorded a total of RM14.56 billion in investment income for the quarter, up 8% from the RM13.46 billion logged a year earlier.
Fixed income instruments contributed RM5.28 billion, or 36%, to the gross investment income in Q2, down from the RM6.17 billion recorded a year ago, due to lower trading gains.
The fund said its diversification into different asset classes, markets and currencies continued to provide income stability and added value to its overall return.
As at end-June, its investment assets stood at RM989.14 billion, of which 37% was invested overseas.
On the i-Sinar and i-Citra facilities, EPF has to date disbursed a total of RM67.6 billion to assist members affected by the Covid-19 pandemic.
On the outlook for 2H, Amir Hamzah said the country’s recovery prospects are dependent on how the Covid-19 situation plays out in the near term.
“While we are confident that the government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, we are very concerned about the retirement security of the people, especially with 46% of EPF members below the age of 55 having less than RM10,000 in their account.
“The pandemic has led to a significant drop in the percentage of members meeting the basic savings threshold (RM240,000 at age 55), from 36% to 27%, pursuant to Covid-19-related withdrawals to supplement their income during the crisis.”
He noted that the pandemic has also triggered a dramatic rise in the number of gig workers in Malaysia.
“While that has helped workers survive, many of them are falling back on their retirement security because of their irregular and unstable income.
“Additionally, they are facing vulnerabilities in terms of employee benefits and coverage for social protection.”
He said the key element of EPF’s strategy going forward is to get gig workers, as well as employees in informal sectors, into its scheme so that they can start to save as early as possible and plan for their retirement. – Bernama, September 24, 2021
