The Employees Provident Fund will continue to sell off its assets to make funds available to depositors who are withdrawing from their Account 1 and Account 2.
The exercise was first put in motion in March.
The EPF is estimating that withdrawals under the i-Sinar and i-Lestari schemes will see about RM45 billion exit the retirement fund by next year.
Reductions in contributions this year and next year raises the total cash outflow to about RM60 billion, the Malaysian Reserve reported.
“As far as we are concerned, the strategic asset allocation (SAA) will continue to be the prime drivers. We are also very cognizant about any impacts to the market,” said EPF chief investment officer Rohaya Mohamad Yusoff
The fund’s CEO Tunku Alizakri Raja Muhammad Alias did not provide details for the liquidation plan other than that they have the long-term in mind.
He also declined to comment on dividends for 2020, saying only that the fund’s mandate was to deliver at least a 2.5 percent nominal dividend and beat inflation by about two percent on a rolling three-year basis.
“I think people forget that there is no such thing as a free lunch. For every amount of money that we give access to our members, it also means less money for us to invest.
“These are unprecedented times of high-quality assets with very low valuations. When more money is taken out and becomes unavailable, the trade-off is we will lose an opportunity,” Tunku Alizakri said.
Under the i-Lestari scheme, contributors could withdraw RM500 per month up to RM6,000 from their Account 2.
Meanwhile, under the i-Sinar scheme allows those who lost their jobs, were given no-pay leave, or have no other source of income, they can withdraw up to 10 percent of their Account 1 savings, as long as they leave a minimum of RM100 in their accounts.
Critics have questioned why the government isn’t digging into its own coffers to help the people instead of asking EPF depositors to dip into their own retirement savings. – MKINI
Two million affected EPF members will have access to 10pc in Account 1 via i-Sinar, says CEO
KUALA LUMPUR, Nov 16 — The Employees Provident Fund (EPF) expects the i-Sinar facility to benefit 2 million eligible members with an estimated advance amount of RM14 billion to be made available.
Chief executive officer Tunku Alizakri Raja Muhammad Alias said the EPF has widened the scope of i-Sinar to cover active members who lost their jobs, were given no-pay leave, or have no other source of income.
Eligible members will have access to 10 per cent of their savings in Account 1, subject to always having a minimum balance of RM100.
“For those who have RM90,000 and below in Account 1, they have access to any amount up to RM9,000.
He said all advances will be staggered over a period of six months with a first month advance of up to RM4,000 for those with Account 1 savings of RM90,000 and below, and of up to RM10,000 for those having more than RM90,000 in Account 1.
Members who choose to apply for the i-Sinar facility will be required to replace the full amount advanced.
“All future contributions will be 100 per cent credited to Account 1 until such time the amount advanced is replenished. Thereafter, contributions will revert to 70 per cent to Account 1 and 30 per cent to Account 2,” he said.
Eligible members can start applying from December 2020 and funds will be credited into members’ bank account by the end of the month following their i-Sinar application.
“First crediting will take place in January 2021 and it will be made over a period of six months from the first date of crediting,” he said.
The facility is aimed at providing affected members supplementary funds to survive the present crisis and ensure some future retirement savings, Alizakri said. — Bernama
MKINI / BERNAMA