KWAP'S gross fund size has grown to RM190.3b – Finance Ministry

 

The Retirement Fund Inc's (KWAP) total gross fund size has reached RM190.3 billion as of Dec 31, 2023, following an adjustment for a cumulative withdrawal of RM20.5 billion for the partial funding of the government's annual pension duties since 2018.

The Finance Ministry said KWAP's unaudited consolidated fund as of Dec 31, 2023, amounted to RM169.8 billion, a growth of 305 percent for a compound annual growth rate of 9.0 percent since its inception on March 1, 2007.

The ministry said that as a long-term institutional investor, KWAP's investment objective is to seek maximum returns on investment on a sustainable basis through dynamic investment strategies in line with the fund’s risk appetite.

“With regard to this, KWAP has not been given the mandate directly to reduce the fiscal implication towards the civil servant pension allowance.

“Nevertheless, KWAP's consolidated fund can be applied towards meeting the government's liability on the cost of annual civil servant pension remuneration through the fund withdrawal mechanism as provided in Act 662’s subsection 13(5),” the ministry said in a post on the Parliament's website today.

The ministry was responding to a question from Mohd Shahar Abdullah (BN-Paya Besar) on whether KWAP's performance could reduce the fiscal impact on civil servant pension allowance.

“The growth of KWAP's consolidated fund, basically, can be linked with consistent investment returns where funds had generated average annual returns of 6.3 percent since its inception.

“This achievement is based on dynamic investment strategies spearheaded by the Strategic Asset Allocation,” it said.

Shahar also asked if the government had plans for the Employees Provident Fund (EPF) to alter its focus from retirement-based benefits to a comprehensive social security scheme.

The ministry said that currently, EPF will continue to give priority to implementing its mandate to ensure the well-being of Malaysians in their old age to ensure a more effective implementation of the country's social security framework.

- Bernama