EPF reassures investment decisions are according to due processes

Amid scrutiny over its investments in the United States, the Employees Provident Fund (EPF) today reassured that its decisions are made according to due processes and governed by relevant stakeholders.

In a statement, the EPF said any investment decisions would first be deliberated by an internal management investment committee.

“This is where proposals are scrutinised in accordance with our long-term diversification strategy.

“This is also in line with EPF’s mandate to grow its members’ retirement savings by investing only in assets that fit its risk-return profile,” it said.

After going through the committee, EPF said final approval would be obtained from an investment panel comprising senior members of its management, Bank Negara Malaysia, industry professionals and the government.

“As a statutory body, the EPF is governed by its board, whose members include representatives from employees, employers, industry professionals and the government.

“The board ensures that the EPF carries out its responsibility to safeguard the interest of its 14 million members,” it said.

In a separate statement, EPF also announced that it had recorded an increase in quarterly investment income to RM11.51 billion for the second quarter of this year, which ended June 30 – a year-on-year increase of 36.36 percent from RM8.44 billion recorded during the same period last year.

EPF chief executive officer Shahril Ridza Ridzuan attributed the increase to improvements in market conditions, highlighting its equities portfolio continuing as the main profit driver for the current quarter under review.

As of June 30, EPF’s overseas investments, which accounted for 29 percent of its total investment assets, contributed 32.5 percent to the total investment income.

“Our foreign investments have proved to be a significant revenue driver in recent years, despite making up less than 30 percent of the total investment portfolio as at Q2 2017.

“The increase in global asset values mitigated the negative effect from the strengthening of the ringgit, providing opportunities for us to realise profit,” said Shahril.

As a whole, it was announced that the total value of EPF investment assets had reached RM759.78 billion, a 3.92 percent or RM28.67 billion increase from RM731.11 billion as of Dec 31 last year.

From the figure, RM362.50 billion or 47.71 percent were in shariah-compliant investments and the balance were invested in non-shariah assets.

Prime Minister Najib Abdul Razak had during his meeting with US president Donald Trump on Tuesday announced that the EPF would increase its US investments by between US$3 billion and US$4 billion "to support (US) infrastructure redevelopment."

He also said that Malaysia wanted to help in terms of strengthening the US economy.

This had earned him brickbats from critics who argued that the total investment commitments, including a separate deal to purchase between US$10 billion and US$20 billion worth of US-made passenger planes and aircraft engines, would be better spent on local infrastructure projects. - Mkini