KUALA LUMPUR, 13 April 2018: The Employees Provident Fund (EPF) today released its Annual Report 2017, which was tabled in Parliament on 3 April 2018. The annual report revealed a 6.38 per cent rise in annual EPF contributions to RM65.52 billion against total withdrawal of RM49.40 billion, resulting in net inflows of RM16.12 billion for 2017. There was also an 8.26 per cent increase in total investment assets to RM791.48 billion from RM731.11 billion in 2016. This was against total members’ contribution of RM768.51 billion as at 31 December 2017.
The EPF had earlier declared a dividend rate of 6.90 per cent for Simpanan Konvensional, with a payout amounting to RM44.15 billion; and 6.40 per cent for Simpanan Shariah, with a payout amounting to RM3.98 billion. In total, the payout for 2017 amounted to RM48.13 billion, which represented an increase of 29.80 per cent from 2016.
Total number of withdrawal applications increased 3.84 per cent to 2.45 million, out of which 2.32 million were approved applications, which amounted to RM49.40 billion through various withdrawal schemes.
EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan said, “Overall, it was a good year with a number of ‘firsts’ for the EPF. Most notably, it was the year we declared the first investment results and dividend rate for Simpanan Shariah. We ended the year with the highest ever gross investment income since 1951 at RM53.14 billion with a gross return on investment of 7.30 per cent, which was 18 basis points higher than in 2016.
“We have been making great strides in meeting our members’ needs as we have introduced more enhancements to our online channels. We are also very close to achieving a 100 per cent take-up rate of our e-Caruman portal by employers, which has proven to be an essential online facility to submit employee contribution details and make payments on time.”
Strong performance for EPF investments
The EPF recorded strong overall performance across all asset classes within its portfolio, largely driven by investments in global equities that benefited from improved market conditions. As at 31 December 2017, the EPF’s total investment asset was RM791.48 billion. The equities portfolio, which makes up 42 per cent of EPF’s total investment assets, generated RM31.47 billion for the year.
Out of the RM53.14 billion gross investment income generated for the year, more than 40 per cent of the income were contributed by the EPF’s investments in global assets, despite constituting only 28 per cent of its investment portfolio.
Reclassification of EPF data
Beginning the third quarter of 2017 (Q3 2017), the EPF undertook a major member and employer data reclassification exercise to realign its data according to the latest provisions of the EPF Act 1991. The main objective of the reclassification exercise was to distinguish between members’ accounts with savings and those with zero savings (dormant account). In addition, individuals and bodies falling within the definition stipulated in the EPF Act 1991 are now classified as ‘employers’, whereas those conducting activities under the informal sector have been classified as ‘self-employed’.
Following the reclassification exercise, the total number of EPF members as at 31 December 2017 was 13.79 million, out of which 7.11 million were defined as ‘active’ (having contributed at least once in the past 12 months) while total number of contributing employers was 494,945.
Excellence through digital platforms and electronic services
The EPF’s strong digital push and continued focus on process enhancements have also seen excellent results in cost management. At 26 basis points per asset under management (AUM), the EPF remains one of the most efficient fund managers in the world. There is also increased efficiency in member and employer services with 93 per cent (60.68 million) of transactions conducted via multiple electronic and self-services channels, compared with 91 per cent (55.41 million) in 2016.
The EPF members’ i-Akaun mobile application has been enhanced further to include interface features to the new EPF account statement, push notifications, secured inbox and FAQs on Simpanan Shariah. It is clearly seen that the i-Akaun is becoming the transaction medium of choice among the EPF members with a significant 40 per cent increase in registrations to 4.70 million from 3.36 million in the previous year. With respect to employer transactions, 2017 recorded over 99.30 per cent of Form A submissions done online, with about 60.90 per cent of contributions conducted via the e-payment facility.
More products and services
In December 2017, the EPF announced several new products and services for members which came into effect on 1 January 2018. Key among them was the option for members to appoint Amanah Raya Berhad as an independent administrator/ trustee to their EPF savings, to facilitate faster and equitable distribution savings to their next-of-kin upon the member’s demise. Another of the enhanced and improved services introduced was the simplification of flexible withdrawals for post-retirement needs, which enables retired members to withdraw any amount at any time to suit their living expenses and needs.
To strengthen the country’s social security landscape and meet the EPF vision of helping members achieve a better future, the year 2017 saw the EPF entered into several strategic alliances with both international and local partners.
In August 2017, the EPF signed an agreement with the International Training Centre of the International Labour Organisation (ITC-ILO) to jointly develop and implement training activities in Malaysia and other Southeast Asian countries through the EPF Learning Campus in Bangi. The aim of these strategic partnerships is to help put Malaysia on the world map as the regional centre of excellence for social protection.
In October 2017, the EPF signed a Memorandum of Understanding (MoU) with Uber Malaysia with the objective of promoting the 1Malaysia Retirement Savings Scheme to the community of Uber driver partners and encourage those employed in the informal sector to plan and save for their retirement.
“We were very pleased with the 2017 performance of the EPF as a whole as not only were we able to record good dividends, we were also able to continually delight our members and help the employers in fulfilling their obligations. In terms of the financial outlook, we anticipate continued market volatility and political uncertainty for the year ahead in both the domestic and global fronts. Nonetheless, we look upon this as an opportunity for us to maintain our financial performance and enhance investment returns over the long run,” notes Datuk Shahril.
“Last year also saw us put in place several initiatives to prepare ourselves for the future in meeting the changing demands of our members and employers as well as creating a very solid digital infrastructure. All these initiatives will enable us to effectively discharge our duty of safeguarding and preserving the value of our members’ savings and remain relevant to our members and employers.”
The EPF Annual Report 2017 is now available for download at the EPF website new.epf.gov.my. Members can also refer to the website for information on EPF products and services, or contact the EPF Contact Management Centre (CMC) at 03-89226000, or visit any of the 68 EPF branches nationwide. To register for i-Akaun, members need to obtain an activation code via EPF Kiosks, EPF counters or call the CMC on weekdays from 8am to 6pm. Members are also encouraged to download the i-Akaun mobile application for free via Google Play or Apple App Store.
About the Employees Provident Fund (EPF)
The Employees Provident Fund (EPF) is Malaysia’s premier retirement savings fund to help its members achieve adequate savings for a comfortable retirement. This is in line with EPF’s vision to help members achieve a better future and the mission to safeguard members’ savings and deliver excellent services. The EPF has evolved significantly from transaction-centric to a professional fund management organisation with a strong focus on retirement security. The EPF is guided by a robust and professional governance framework when making investment decisions. It continues to play a catalytic role in the nation’s economic growth and seeks to cultivate a savings and investment culture among its members to improve the country’s financial literacy level.