KUALA LUMPUR – Withdrawals from the Employees Provident Fund’s (EPF) Account 3 will not affect the retirement fund’s investment strategy, as they will be carried out in controlled amounts and within an organised framework, said chief executive Ahmad Zulqarnain Onn.
He emphasised that EPF had anticipated a withdrawal of up to RM25 billion from Account 3 in the first year, followed by an estimated RM5 billion in the subsequent year.
“EPF’s overall investment assets stand at RM1.2 trillion, so these withdrawals are actually manageable, predictable and not a cause for concern,” he said, noting that this was unlike the previous withdrawals where EPF members had unexpectedly taken out RM145 billion from the fund.
He said this during the Fireside Chat 2 discussion session, held in conjunction with the Sasana Symposium organised by Bank Negara Malaysia.
Moderated by Nurhisham Hussein, senior director of economics and finance at the Prime Minister’s office, the discussion centred around retirement savings.
EPF has reportedly approved 3.04 million applications to withdraw a total of RM5.52 billion from Account 3 as of May 22, raising concerns about a potential shift in the fund’s investment portfolio to highly liquid assets in order to facilitate withdrawals.
This, in turn, would impact the fund’s investment returns, as highly liquid assets frequently generate low returns.
Elaborating on EPF’s investment strategy, Zulqarnain said there would be a reallocation of low-risk assets to high-risk assets in the domestic market, but this would be done in a prudent manner.
“Infrastructure in the domestic market (is something that we can look into), and we’re relatively optimistic at the way things are evolving right now.
“Certain segments like data centres and industrial logistics are actually in a very strong growth phase and putting capital here will give you a decent amount (of returns), same goes to the semiconductor, electrical and electronics products,” he added.
EPF achieved growth of 4.2% year-on-year in the first quarter ended March 31, 2024, and maintained its optimistic outlook for both the domestic and the global economy. – June 13, 2024