EPF aims RM20-30b allocation for Simpanan Syariah

KUALA LUMPUR: The Employee's Provident Fund (KWSP) will aim for additional allocation of between RM20 billion to RM30 billion annually for its Simpanan Syariah starting from 2018.
EPF CEO Datuk Shahril Ridza Ridzuan (pix) said the additional allocation will depend on the availability of assets to invest.
"We will look at the growing trend of syariah assets in Malaysia. If it is good, we can expect to allocate between RM20 billion to RM30 billion annually", he told reporters after officiating the registration of Simpanan Syariah at EPF headquarter in Jalan Raja Laut today.
Currently, a fund size of RM100 billion has been reportedly allocated for the Simpanan Syariah 2017 as it would be based on a first come, first served basis.
"The syariah fund will focus on capital stabilization and a return of inflation above 2%", Shahril said.
He added that EPF's move to allow its member to opt to invest in unit trust funds that are 100% invested overseas are meant to provide opportunities for asset diversification for them.
"It is still new. We won't see that much of a take-up at this moment," he said.
"However, the unit trust industry is also re-adjusting its portfolio offering and we expect this to pick-up in time."
Simpanan Syariah, the new EPF retirement savings option, is currently open for registration for its members at all its offices nationwide. It allow members to convert their conventional EPF savings to syariah-compliant savings.
The new savings would then be launched at January 2017.
Simpanan Syariah is open to everyone including non-Muslims and non-nationals. Members who wants to convert their EPF savings are advised to fully understand Syariah principles first.
Today, Bernama reported at least 5,000 members have applied for Simpanan Syariah savings at 68 branches nationwide as of 8.30am.
Meanwhile in Penang, there was overwhelming response from members to convert their saving to Simpanan Syariah at its Seberang Jaya branch here.
The crowd gathered as early as 7.30am with EPF officials starting operations 15 minutes later and helping members with their application forms.
EPF Chief Executive Officer (Investment) Datuk Mohamad Nasir Ab Latif who was at the Seberang Jaya branch said the first 50 minutes saw 208 members signing up for the Simpanan Syariah.
He said he foresaw the initial allocation of RM100 billion to be taken up soon.
" The fund size of the amount is equivalent to about 15% of the EPF's total investment asset of RM681.71 billion as at end March this year.
"Those who fail to apply by December 23 will be put on waiting list for the next round in 2018," said Nasir.
Mohamed Nasir added the application was based on first-come-first-served basis.
Nasir said there has been good response in other EPF branches , especially in Kajang, Selangor and from their study, they expect 70% EPF members to switch to Simpanan Syariah.