EPF Implements Product and Policy Enhancements to Boost Members Future Retirement and Income Security
KWASA DAMANSARA, 24 January 2024: The Employees Provident Fund (EPF) implements a series of product and policy enhancements, strategically designed to fortify the retirement future and income security of its members and potential members.
These initiatives, aligned with the Government’s Budget 2023 and 2024 announcements by YAB Prime Minister Dato’ Seri Anwar Ibrahim on 24 February 2023 and 13 October 2023, respectively, signify a proactive response to the evolving needs of EPF members, ensuring financial resilience and wellbeing during their retirement years.
Key highlights of the EPF’s latest enhancements include:
1. Matching Contribution Incentives for EPF’s i-Saraan and i-Suri take effect
Starting 1 January 2024, the Government’s maximum matching incentive limit for the i-Saraan programme has been raised from RM300 to RM500 per year. Malaysians in the informal sector, including the self-employed with no fixed income, under the age of 60, and voluntarily contributing to i-Saraan, will receive a matching incentive of 15% of the voluntary contribution, subject to a maximum incentive limit of RM500 per year. The Government will also continue to give incentives to every i-Saraan participant who contributes, subject to a maximum lifetime incentive of RM5,000. This aims to encourage them to continue saving for retirement and allow more members to benefit from this Government incentive. For the first half of 2023, Government incentives amounting to RM28 million have been credited to 211,361 members under the i-Saraan programme.
For the i-Suri programme, the Government will provide a matching incentive of 50% on every RM1 voluntary contribution by housewives who are under the age of 55 and registered in the e-Kasih database, subject to a maximum incentive limit of RM300 per year. The Government will also continue to provide incentives to every i-Suri participant who contributes subject to a maximum lifetime incentive of RM3,000. For the year 2023, Government incentives amounting to RM19 million have been credited to 42,532 members under the i-Suri programme.
The EPF encourages members to leverage the increased matching incentives for i-Saraan and i-Suri programmes so they are able to further build their retirement savings, ensuring a more secure and prosperous future.
2. Separation of Simpanan Shariah portfolio from Simpanan Konvensional
Starting 1 January 2024, the EPF has strategically separated its Simpanan Konvensional and Simpanan Shariah portfolios in relation to their Shariah-compliant investment, aiming to allow each portfolio’s returns to be optimised in the long run with each portfolio having its independent strategic asset allocation. Since the Budget 2023 announcement, the EPF has been working towards the implementation of this strategic split, aiming to enhance alignment with the mandate and long-term strategic objectives of Simpanan Shariah. The move is also a proactive move to ensure that assets under both Simpanan Shariah and Simpanan Konvensional are well diversified across asset classes, markets, countries, and currencies to ensure sustainable returns.
Simpanan Shariah was introduced in January 2017 as an option for members who wish to have their EPF savings managed and invested in accordance with Shariah principles. As of 30 September 2023, the EPF’s investment assets amounted to RM1,092.32 billion, comprising 39% Shariah assets and 61% conventional assets.
In addition to adhering to ethical investment practices that avoid sectors such as alcohol, gambling, adult entertainment, and military weapons, Simpanan Shariah employs a rigorous Shariah screening process and appropriate Shariah contracts in its investment. This process, based on criteria and policies set by the EPF’s Shariah Advisory Committee (SAC), ensures that all investment assets are in line with Shariah principles, eliminating Shariah non-compliant elements such as usury, uncertainty in contracts, as well as prohibited items like non-halal goods and services.
3. Enhancement of i-Invest platform to enable transactions for private mandate portfolios
The enhancements allow members to transact approved private mandate portfolios, in addition to approved unit trust funds currently, on the i-Invest platform. Prior to this, members were only able to buy, sell, or switch approved private mandate portfolios through agents. Private mandate portfolios are one of two investment products currently offered under the EPF Members Investment Scheme (MIS). In contrast to unit trust funds, private mandate portfolios are investment instruments that can be customised to align closely with a member’s specific objectives, needs, and risk tolerance, managed professionally by authorised fund management institutions (FMIs).
The EPF has also included ESG-based investment products in the list of approved investments to support Sustainable and Responsible Investment (SRI) products and to mainstream EPF’s sustainability agenda. Initial sales charges for investments into ESG-based investment products conducted through i-Invest are low.
Notable enhancements to the i-Invest platform included:
i) Investment Holdings (i-Invest web and mobile application)
- Each private mandate portfolio being individually named and displayed. Previously, holdings for private mandate portfolios were grouped into three generic categories: full discretionary portfolios (FD), semi-discretionary portfolios (SD), and non-discretionary portfolios (ND)*;
ii) Portfolio Information (i-Invest web only)
- In addition to existing information pages for unit trust funds, members can also view pages for private mandate portfolios which include documents such as portfolio factsheets and investment management agreements, detailing all the terms and conditions governing the relationship between members and the authorised FMIs.
iii) ESG Tagging (i-Invest web only)
- ESG (Environmental, Social, and Governance) tags to identify Sustainable and Responsible Investment (SRI) products offered by authorised FMIs.
These collective enhancements represent the EPF’s commitment to not only improving the adequacy of retirement savings and expanding coverage, but to providing cutting-edge tools that empower members to make informed decisions for them to achieve a better future.
For more information on the enhancement initiatives, members can refer to the respective FAQs available on the EPF official website at www.kwsp.gov.my or contact the EPF Contact Management Centre at 03-8922 6000.
Issued by the EPF Media Desk
Corporate Affairs Department
24 January 2024
*FD is fully managed by professional fund managers, with an Active status under the MIS, which means EPF members can invest and switch into such portfolios; SD is jointly managed by professionals and EPF members themselves, with a Suspended status, which means EPF members can redeem and switch out but cannot invest or switch into such portfolios; and ND is managed by EPF members themselves with a Suspended status.
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.