EPF’s investment income up 25pc to RM34.05bil

Kuala Lumpur: The Employees Provident Fund’s (EPF) total investment income grew 25 per cent year-on-year to RM34.05 billion in the first half (H1) of 2021.

Total gross investment income for the second quarter (Q2) was, however, lower at RM14.77 billion against the RM15.12 billion recorded in the same quarter last year, the retirement fund said.

Chief Executive Officer Datuk Seri Amir Hamzah Azizan said the EPF delivered a resilient performance in H1 2021 driven by the progressive recovery of the equity markets and most asset classes amid the global rebound.

“Equities continued to be the main contributor of income for Q2 2021 at RM7.89 billion, accounting for 53 per cent of total gross investment income,” he said in a statement Friday.

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During the quarter, a total of RM0.21 billion was written down for listed equities compared to RM1.66 billion in Q2 2020 following the continued recovery across global markets. The cost write-downs are part of the fund’s internal policy to ensure a healthy portfolio.

The EPF said after netting off these write-downs, the EPF recorded a total of RM14.56 billion of investment income in the quarter, up eight per cent from RM13.46 billion a year earlier.

Fixed income instruments contributed RM5.28 billion or 36 per cent to the gross investment income in Q2 2021, down from the RM6.17 billion recorded in Q2 2020 due to lower trading gains.

According to the EPF, its diversification into different asset classes, markets and currencies continued to provide income stability and added value to the fund’s overall return.

As at end-June, its investment assets stood at RM989.14 billion, of which 37 per cent was invested overseas.

On i-Sinar and i-Citra facilities, the EPF has to date disbursed of a total of RM67.6 billion to assist members affected by the pandemic.

On the outlook for the remaining half of the year, Amir Hamzah said the country’s recovery prospects are dependent on how the Covid-19 situation plays out in the near term.

“While we are confident that the government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, we are very concerned about the retirement security of the people, especially with 46 per cent of EPF members below the age of 55 having less than RM10,000 in their account.

“The pandemic has led to a significant drop in the percentage of members meeting the basic savings threshold (RM240,000 at age 55) from 36 per cent to 27 per cent, pursuant to the COVID-19-related withdrawals to supplement their income during the crisis,” he said.

He noted that the pandemic has also triggered a dramatic rise in the number of gig workers in the country.

“While that has helped workers survive, many of these workers are falling back on their retirement security due to the irregular and unstable income.

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“Additionally, they are facing vulnerabilities in terms of employees’ benefits and coverage on social protection,” he said.

Amir Hamzah said the key element of the EPF’s strategy going forward is to get the gig workers, as well as those in the informal sectors, into its scheme so they can start to save as early as possible and plan for their retirement.

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