EPF 2019 FINANCIAL PERFORMANCE FOR SIMPANAN KONVENSIONAL
EPF 2019 FINANCIAL PERFORMANCE FOR SIMPANAN SHARIAH
1: EPF 2019 CORPORATE PERFORMANCE
As of 31 December 2019, the EPF recorded 14.6 million members, out of which 7.6 million were active members. The members encompass five generations of the Malaysian workforce: 1.4% are born between years 1900 to 1940, 8.0% are Baby Boomers (born between years 1941 to 1960), 38.3% are from Generation X (born between years 1961 to 1980), 51.5% are from Generation Y (born between years 1981 to 2000) and 0.9% are from Generation Z (born from 2001 onwards).
In the same year, the EPF saw a 24.6% growth in i-Akaun subscribers from 2018’s 6.1 million subscribers, to 7.6 million subscribers. Employers registered under the EPF grew by 3.0% from 507,100 to 522,300 employers.
The Fund received an average monthly contribution collection of RM6.3 billion, leading up to a total collection of RM75.9 billion by the end of 31 December 2019, which translates to an approximate RM144,000 per minute. There were a total of RM44.8 billion in withdrawals which translates into an estimated RM85,000 disbursed to members every minute. Net contributions to the EPF came up to RM31.1 billion, or an average of RM2.6 billion monthly and RM59,000 per minute.
In order to better serve its members, the EPF undertook several initiatives in 2019 such as the launch of i-Invest which recorded a transaction value of RM81.8 million, benefitting over 10,000 members, since the launch in August 2019. Financial literacy remains one of the core initiatives for the year, with the launch of the Belanjawanku and My Money Matters guides, both providing information and tips on financial spending. Voluntary contribution schemes i-Saraan (for informal workers) and i-Suri (for housewives) recorded RM144 million and RM7.4 million in transactions respectively, underlining the EPF’s commitment to expanding social security coverage.
In addition, the EPF’s award winning Retirement Advisory Service (RAS), which aims to empower and equip members with the knowledge and tools to manage their finances in retirement, was expanded to 52 of the EPF’s 68 branches, from 28 branches in 2018.
2: EPF 2019 FINANCIAL PERFORMANCE FOR SIMPANAN KONVENSIONAL
The EPF’s overall investment assets stood at RM924.75 billion as of 31 December 2019, of which 37% was invested in the Shariah portfolio and 63% in the Konvensional portfolio. Returns from the entire Konvensional portfolio and part of the Shariah portfolio are attributable to Simpanan Konvensional.
For 2019, the EPF reported a gross investment income of RM50.29 billion, with two-thirds coming from stable interest and dividend streams. Of the RM50.29 billion, RM45.82 billion was attributed to Simpanan Konvensional.
EPF’s dividend payouts are derived from total gross realised income for the year, after deducting net impairment on financial assets, realised losses from listed equities, unrealised gains or losses from intercompany transactions, investment expenses, operating expenditures, statutory charges as well as dividend on withdrawals.
The payout amount required for each 1.00% of the dividend in 2019 for Simpanan Konvensional was RM7.65 billion, compared to RM6.99 billion in 2018.
Out of the total investment assets, 49% was allocated to fixed income instruments for capital preservation purposes. The allocation to equities, for capital enhancement purposes, was 39%. Money market instruments for capital preservation and liquidity management comprised 7%, while real estate and infrastructure for capital preservation and capital enhancement purposes made up another 5%.
Equities continued to be the main contributor to income at 47%, amounting to RM21.49 billion, compared to RM26.66 billion in 2018.
Fixed income instruments provided a measure of income stability in 2019’s volatile environment and as expected, the income from capital gains increased due to lower market yields. Investments in fixed income instruments comprising Malaysian Government Securities & Equivalent and Loans & Bonds, in total contributed 43%, or RM19.60 billion, compared to RM16.64 billion in 2018.
Real Estate & Infrastructure contributed RM3.03 billion or 6% to investment income in 2019, while Money Market Instruments contributed RM1.70 billion or 4% to investment income during the year.
The EPF’s overseas holdings across all asset classes stood at 30.3% and contributed 41.0% to its gross investment income. External fund managers managed 14.4% of the total funds and contributed 18.3% to income.
3: EPF 2019 FINANCIAL PERFORMANCE FOR SIMPANAN SHARIAH
The EPF’s total assets stood at RM924.75 billion as of 31 December 2019, of which the EPF’s overseas holdings across all asset classes and both Shariah and Konvensional portfolios stood at 30.3% and contributed 41.0% to the overall gross investment income. Meanwhile, external fund managers managed 14.4% of the total funds and contributed 18.3% to overall gross investment income.
For 2019, the EPF’s gross investment income from its Shariah investments was RM17.88 billion, with a quarter of this attributable to Simpanan Shariah and the remainder attributable to Simpanan Konvensional. The payout amount required for each 1.00% of the dividend in 2019 was RM0.83 billion, compared to RM0.73 billion in 2018.
From the total investment assets, 37% was invested in the Shariah portfolio. Out of this portfolio, 47% was allocated to fixed income instruments for capital preservation purposes. The allocation to equities for capital enhancement purposes was 42%. Money market instruments for capital preservation and liquidity management comprised 8% while real estate and infrastructure for capital preservation and capital enhancement purposes, made up another 3%.
As 2019 was a good year for shariah fixed income instruments, which provide a measure of income stability in a volatile environment, its income from capital gains increased due to lower yields. Investment income for Simpanan Shariah in fixed income instruments comprising Malaysian Government Securities & Equivalent and Loans & Bonds, in total contributed 47%, or RM2.10 billion, compared to RM1.75 billion in 2018.
For the year under review, Equities contributed 45% to the Simpanan Shariah investment income amounting to RM1.99 billion compared to RM2.63 billion in 2018.
Money Market Instruments contributed RM0.24 billion or 5% in Simpanan Shariah investment income in 2019, while Real Estate & Infrastructure contributed RM0.14 billion or 3% to Simpanan Shariah investment income during the year.