KUALA LUMPUR: The Employees Provident Fund (EPF) will open registration for its new retirement savings option Simpanan Shariah, which will be launched next year, to members on Aug 8, 2016.
Chief executive officer Datuk Shahril Ridza Ridzuan said the EPF has allocated an initial fund size of RM100 billion, which is equivalent to about 15 per cent of the EPF’s total investment assets of RM681.71 billion as at end-March 2016.
“Members who choose to convert their current EPF account, which will now be termed as Simpanan Konvensional, to Simpanan Shariah will need to personally go to any EPF branch with their identification card to verify their thumbprint.
“To be eligible for Simpanan Shariah 2017, members must submit their application by Dec 23, 2016 subject to the availability of the RM100 billion fund,” he said in a statement yesterday.
Shahril Ridza said the EPF’s venture into Islamic investments is not new as more than 45 per cent, or RM295 billion, of the EPF’s total investment assets are already Shariah-compliant.
“Moving forward, we expect to grow our investment in Shariah assets by at least RM25 billion a year on average, or in tandem with the total asset growth in order to maintain a minimum of 45 per cent Shariah assets,” he added.
In compliance with Shariah principles, the EPF said the dividend rate for Simpanan Shariah would be based on the portfolio performance of Shariah-compliant investments and would not have any guaranteed minimum dividend.
“A Shariah Advisory Committee (SAC) has been formed to oversee all operational, investment and governance aspects of Simpanan Shariah. The SAC will also recognise Shariah investment products as regulated or approved by Bank Negara Malaysia and the Securities Commission Malaysia,” it said.
The EPF’s Simpanan Shariah is a new savings option for members who wish to convert their current conventional EPF savings to one that is managed and invested in accordance with Shariah principles.
Based on the Members’ Consultation exercise carried out last year, the EPF found that more than 70 per cent of the survey respondents agreed that there should be an option to have their retirement savings managed according to Shariah principles.
At a media briefing earlier, Shahril Ridza said the next tranche of the Shariah savings option would be open next year and its fund size likely be determined by this year’s exact demand and availability.
“It still early for us to determine the fund size. As for this year, we feel that the RM100 billion allocation is sufficient to cater to the demand. “It is a first come first serve basis scheme. If they (EPF members) failed to get the first tranche, they will automatically be queued for next year,” he said. — Bernama