Press Digest - Wait-and-see advice over EPF syariah fund scheme

PETALING JAYA: The Employees Provident Fund (EPF), which is to launch its first fully syariah-compliant scheme, called Simpanan Syariah, in January next year, will register members who want to make the switch from Aug 8 to Dec 23.
EPF chief executive Datuk Shahril Ridza, in announcing the registration window on Monday, reminded members that there is no turning back once they opt for Simpanan Syariah.
This begs the big question: to stick to the current conventional scheme, which guarantees a minimum dividend rate of 2.5% a year, or have one's entire savings transferred to a programme based on Islamic principles, which does not offer any guaranteed returns.
Great Vision Wealth Management Sdn Bhd tax and financial planning head Datuk Chua Tia Guan pointed out that the difference between the two is that the conventional scheme will provide higher returns or dividends when the economy is well whereas Simpanan Syariah offers more stable and better returns when times are bad, China Press reported today.
Chua suggested that members who have doubts about the performance of the new fund should wait and see.
They can still make the switch a year later after assessing Simpanan Syariah's first-year performance.
Of course many will opt for the new scheme for religious reasons. But there is no harm for members to wait and see before making a decision, he said.
Simpanan Syariah, which has an initial fund size of RM100 billion, is open to all EPF members.
EPF's total investment assets grew to RM667.56 billion as at September last year.
Meanwhile, Malaysian Trades Union Congress (MTUC) secretary-general N. Gopal Kishnam urged EPF to explain to members the rationale behind Simpanan Syariah and the differences between the existing and new funds.