Last updated  : 9/24/21 3:41 PM     

EPF RECORDS RM34.05 BILLION IN INVESTMENT INCOME FOR 1H 2021

KUALA LUMPUR, 24 September 2021: The Employees Provident Fund (EPF) recorded RM34.05 billion of total investment income for the first half of the year ended 30 June 2021 (1H 2021), an increase of RM6.79 billion, or 25%, compared to RM27.26 billion in the corresponding period in 2020.

Total gross investment income for the second quarter (Q2 2021) was RM14.77 billion, RM0.35 billion lower than RM15.12 billion recorded in the same quarter last year. Equities continued to be the main contributor of income for Q2 2021 at RM7.89 billion, accounting for 53% of total gross investment income.

As part of its internal policy to ensure a healthy portfolio, the EPF has adopted cost write-downs on listed equities. In Q2 2021, RM0.21 billion was written down for listed equities, compared to RM1.66 billion in the same quarter in 2020 following the continued recovery across global markets. After netting off these write-downs, a total of RM14.56 billion of investment income was recorded in Q2 2021[1], 8% higher than the RM13.46 billion recorded in Q2 2020.

EPF Chief Executive Officer Datuk Seri Amir Hamzah Azizan said, “The EPF delivered a resilient performance in 1H 2021 driven by the progressive recovery of the equity markets and most asset classes amid the global rebound.

“The accelerating roll-out of COVID-19 vaccines and the reopening of economies had supported a stronger performance for equities in the developed markets. However, equities in  the emerging markets were more muted, due to the resurgence of COVID-19 in Southeast Asian countries and tighter regulations imposed by China authorities on several sectors that had triggered a sharp decline in stock prices.”

Fixed Income instruments continued to contribute a stable income of RM5.28 billion, or 36%, to the gross investment income in Q2 2021.  This was lower compared to the RM6.17 billion recorded in Q2 2020 due to lower trading gains.  This is in line with higher interest rates in Q2 2021, compared to the corresponding period last year.

Real Estate and Infrastructure, and Money Market instruments, meanwhile, recorded RM1.40 billion and RM0.20 billion respectively.


The EPF’s diversification into different asset classes, markets and currencies continued to provide income stability and added value to its overall return. As at end June 2021, the EPF’s investment assets stood at RM989.14 billion, of which 37% was invested overseas.  In Q2 2021, overseas investments generated an income of RM8.71 billion, 59% of the total gross investment income recorded.


To assist members affected by the pandemic, the EPF launched the i-Sinar and i-Citra facilities which were intended to provide some financial relief. To date, this has involved the disbursement of a total of RM67.6 billion:

 

Facility

No. of Applicants (million)

Amount approved (RM billion)

Amount disbursed (RM billion)

i-Citra

5.0

20.8

9.1

i-Sinar

6.6

58.8

58.5

About 89% of applicants under i-Sinar and 86% under i-Citra stated that the withdrawals were used for daily expenses or urgent financial needs.

Outlook for the rest of the year

For the remaining half of the year, Datuk Seri Amir Hamzah highlighted that the country’s recovery prospects were 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% of EPF members below the age of 55 having less than RM10,000[1] 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% to 27%, pursuant to the COVID-19-related withdrawals to supplement their income during the crisis. The pandemic has also triggered a dramatic rise in the number of gig workers in the country, and while that has helped workers survive, many of these workers are falling back on their retirement security due to the irregular and unstable income. Additionally, they are facing vulnerablities in terms of employees’ benefits and coverage on social protection.

“There will be far-reaching repercussions not only on their future well-being, but  also on the Government, who will have to carry that financial burden. 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 the EPF Scheme so they can start to save as early as possible and plan for their retirement,” he said, adding that a coordinated solution for the longer term is needed to ensure better social protection for all Malaysians.

“As we recover from the crisis, EPF’s focus is to help members restore and rebuild their retirement savings to ensure that they are able to secure a dignified retirement. We will remain focused on our Strategic Asset Allocation and continue to be cognisant of the risk profiles of the markets as they develop so we are able to shift along the way. While we are doing that, our fundamental purpose of providing returns and protection for our members’ future well-being will continue to be preserved,” he said.

 

Issued by the EPF Media Desk
Corporate Affairs Department
24 September 2021
 

About the Employees Provident Fund (EPF)

The Employees Provident Fund (“EPF”) is one of the oldest retirement funds in the world. Established in 1951, the EPF is a social-security organisation focused on safeguarding member savings and delivering excellent services. In recent years, in line with its vision of helping members achieve a better future, the EPF has expanded its role to encompass the creation of a comprehensive social well-being ecosystem. Today, the EPF remains steadfast in its commitment to members through consistent efforts to update and improve itself, in order to build the foundation for sustainable, holistic and equitable well-being for all Malaysians

 

APPENDIX 1

Summary of EPF’s Q2 2021 Results

Q2 2021

Portfolio

% of total investment asset

Gross investment income

(RM billion)

% of income

Equities

44%

7.89

53

Fixed Income Instruments*

46%

5.28

36

Money Market Instruments

4%

0.20

2

Real Estate & Infrastructure

6%

1.40

9

Total

100%

14.77

100%

* Contributions from Malaysian Government Securities & Equivalent, Loans and Bonds

Cumulative cost write-down

 Q2 2020

Comparison

Q2 2021

6.32

Cumulative cost write-down (RM billion)

0.25

1.66

Cost write-down for listed equities (RM billion)

0.21

20.94

Cumulative Investment income net of cost write-down (RM billion)

33.80

*Cost write-down is an internal policy adopted by the EPF on its Listed Equity investment as a prudent measure to ensure the portfolios remain healthy. Significant cost write-down in 2020 has allowed EPF to realise higher capital gains during market recoveries, as experienced in H1 2021.

APPENDIX 2

EPF Data on Members Inadequacy of Retirement Income

Statistics on Members Aged Below Age 55 (As at 31 August 2021)

No

Savings Range

Total Members Below Age 55 (Million)

% of Total Members Below Age 55

1.

RM10,000 and below

5.80

46

a) <RM1,000

2.37

19

b) >RM1,000 to RM5,000

2.32

18

c) >RM5,000 to RM10,000

1.11

9

2.

Above RM10,000

6.83

54

Total

12.63

100