Of late, there has been a spate of resignations from the Armed Forces Fund Board (LTAT).
In less than a month, three senior officers have withdrawn from the establishment.
It started with the resignation of LTAT chief executive officer Ahmad Nazim Abd Rahman on Jan 31, which was followed by the quitting of its chairperson Raja Mohamed Affandi Raja Mohamed Noor on Feb 8.
On Feb 19, LTAT's senior strategic director Dayana Rogayah Omar reportedly tendered her resignation.
LTAT initially claimed that Affandi had retired but the latter reportedly denied it, stressing that he had resigned. This was later confirmed by Defence Minister Mohamed Khaled Nordin.
The spate of resignations has raised questions on whether the entity, which manages the retirement funds of more than 120,000 armed forces personnel is being plagued by an internal crisis.
What is LTAT?
The LTAT is a statutory body established in 1972 under the Armed Forces Fund Act. It manages the pensions for officers and members of other ranks of the Malaysian Armed Forces (ATM) and volunteers.
The latest amendment to the Act was made on Nov 1, 2022. Currently, there are 116,456 ATM members, with 110,792 active ones.
Under the LTAT scheme, contributors are required to save up 10 percent of their monthly pay, while the government pumps in another 15 percent.
Participants of the voluntary savings scheme are allowed to contribute a minimum of RM25 a month, or a maximum of RM2,000 per month.
In addition to receiving annual dividends, contributors also enjoy death and disability payment benefits. The scheme also provides financial assistance for buying a house, performing the hajj and education.
As of Dec 31, 2022, LTAT reportedly had assets amounting to RM10.3 billion.
In 2022, LTAT declared a five percent dividend payout to its members, compared to 4.1 percent in 2021, 3.5 percent in 2020, 2.5 percent in 2019, and two percent in 2018.
Mampan 25
Previous reports said that Nazim resigned out of concern for the decision to postpone LTAT's Strategic Plan 2023-025 (Mampan 25).
The delay reportedly has the potential to affect implementation and pose a major risk to LTAT's balance sheet.
In addition, the move is also feared to impact LTAT's ability to meet the minimum dividend target for 2023.
Mampan 25 was launched on July 13, 2023, by then-defence minister Mohamad Hasan, and chartered a new direction for LTAT to weather economic challenges.
The plan was touted to be able to protect the social welfare of contributors and be a catalyst for the entity's transformation towards a sustainable savings fund.
It consists of four values - growth, durability, impact and trust, premised by the commitment to better manage the retirement funds of military personnel.
Sale of Boustead Plantations, LTAT picket
In Sept 2023, LTAT came under fire from opposition lawmakers over its decision to sell Boustead Plantations Bhd.
Mohamad then justified the move, saying the sale was necessary to increase the statutory body's assets liquidity, which at that time stood at less than 20 percent.
This happened as the fund board had placed 56 percent of its investment into Boustead Holdings (Boustead), which is its parent company.
According to Mohamad, by placing most of its investment "in one basket", LTAT faced a huge risk should anything were to happen to Boustead.
Boustead Plantation's sale would help LTAT increase the liquidity of its assets to over 60 percent, he said.
Asset liquidity refers to the ability to convert a financial asset into cash without a change in its market price.
On Oct 4, 2023, it was reported that Kuala Lumpur Kepong Bhd's (KLK) acquisition of 33 percent stake in Boustead Plantations has been terminated.
On Oct 9 last year, the Dewan Rakyat was told that the Finance Ministry had agreed to provide a government guarantee to LTAT to buy Boustead Plantations.
In July 2022, LTAT also attracted attention when more than 100 of its staff staged a picket because they were disappointed with the management for not attending to the various demands and issues raised.
The development came after more than two years of the LTAT management refusing to pay salary adjustment arrears through the revision in salary and service schemes - which came into force on Jan 1, 2020.
Khaled has yet to provide an official statement regarding the possible crisis in LTAT.
The Umno vice-president's only previous statement was confirming that Affandi had voluntarily resigned from his post. - Mkini
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