Malaysia’s EPF reports 18% drop in investment income

The latest figures don’t take into account early withdrawals in April from EPF retirement accounts permitted by the government to help Malaysian workers cope with lingering economic hardships in the wake of the COVID-19 pandemic.

On April 16, midway through the program – the fourth early withdrawal facility since early 2020 – the government reported 5.3 million of the national defined contribution system’s almost 15 million active or retired members had applied to withdraw a combined 40.1 billion ringgit from their retirement accounts.

Peninsular Malaysia’s politically dominant Muslim Malay majority accounted for 63% of the applicants.

The EPF has yet to announce withdrawals for the second half of April, almost two months after the facility was concluded.

But in Tuesday’s announcement, Mr. Amir Hamzah took the opportunity to warn that further withdrawals could compromise the EPF’s ability to effectively maintain its central role in the country’s retirement safety net.

“Any further withdrawals would financially impact the EPF and weaken the fund’s current portfolio position and capacity to ensure sustainable returns,” he said.

For the quarter ended March 31, the EPF said the 44% of its portfolio parked in equities, at home or abroad, accounted for 10.5 billion ringgit of its investment income for the period, or 66% of the total.

That marked a 27% drop from the year before when investment income of 14.4 billion ringgit accounted for 74% of overall income for the quarter ended March 31, 2021.

By contrast, income from the 45% of the EPF portfolio in fixed-income instruments rose 22% from the year before to 4.8 billion ringgit, or 30% of total gross income, “largely due to higher market yield” in the latest quarter compared. with the year-earlier period.

Both the 6% of the portfolio allocated to real estate and infrastructure as well as the 5% in money market instruments delivered 2% apiece to gross income for the period.

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