EPF: Simpanan Shariah registration starts Aug 8

KUALA LUMPUR: Those who wish to switch to the new retirement savings option “Simpanan Shariah” can start to register from Aug 8, according to the Employees Provident Fund (EPF).
The Islamic pension scheme, which will take effect on Jan 1, 2017, will see its dividend rate based on portfolio performance of syariah-compliant investment with no guaranteed minimum dividend.
As the conventional and Islamic schemes have the same risk-return objectives, both portfolios are expected to deliver similar dividend rates over the long-term, which is inflation rate plus 2%.
“But you should expect over the short period, there will be differences in dividend,” CEO Datuk Shahril Ridza Ridzuan told a media briefing here yesterday.
Simpanan Shariah is open to all EPF members regardless of race, religion and nationality. Worth noting is that members who have chosen Simpanan Shariah are not allowed to revert back to the conventional scheme after the effective date.
The initial fund size for the scheme is RM100 billion and will be allocated on a “first come first serve” basis.
EPF members must submit their applications by Dec 23, 2016 personally at any EPF branch with their identification card to verify their thumbprint.
Based on a consultation exercise carried out by EPF last year, 70% respondents agreed that there should be an option to have retirement savings managed according to syariah principles.
“Therefore, we are confident of the take-up of the new scheme,” Shahril said.
He said the RM100 billion fund size constituted about 15% of EPF’s total investment asset of RM681.71 billion as at end-March, 2016.
Currently, Islamic investments make up 45% or RM295 billion of EPF’s total investments.
In order to maintain a minimum of 45% syariah assets, Shahril said, EPF will need to grow its syariah assets by at least RM25 billion to RM30 billion a year.
As at end-December 2015, EPF had 14.55 million members, of which 6.79 million are active members.