The Worker Provident Fund (EPF) achieved a wonderful efficiency for 2020 by way of operational and monetary outcomes, declaring a dividend of 5.20% for Simpanan Konvensional with a payout amounting to RM 42.88 billion.

For Simpanan Shariah, the EPF introduced a dividend of 4.90% with a payout amounting to RM 4.76 billion. The whole fund cost for 2020 is RM 47.64 billion.

With a five-year common actual dividend of 4.62% for Simpanan Konvensional and 4.32% for Simpanan Shariah after adjusting for inflation, EPF exceeded its strategic goal of declaring a minimum of 2.00% common precise dividend on a rolling five-year foundation.

For 2020, the pension fund recorded its highest gross funding revenue on report – RM60.98 billion. Funding belongings additionally reached RM1.02 billion on the finish of final yr.

EPF’s excellent efficiency in 2020 was achieved regardless of the as soon as in a lifetime occasion arising from the COVID-19 pandemic and the distinctive circumstances the world discovered itself in, with the twin well being and financial disaster.

“We’ve got been profitable in defending our members’ retirement financial savings, whereas assembly their speedy must face present challenges. It has not been simple at instances as we’ve got needed to stroll a tightrope to make sure that our members survive tough instances whereas balancing their future wants, ”stated EPF President Tan Sri Ahmad Badri Mohd Zahir .

“The speedy unfold of COVID-19 and its transmissibility has made it a Black Swan occasion that many have discovered tough to handle. Nevertheless, we’ve got been proactive in managing the pandemic and this has helped us overcome the challenges.

“Our give attention to digitization has allowed us to assist our members in a extra environment friendly and clear method, whereas guaranteeing that we stay related to members who’re extra tech savvy.

“EPF’s speedy adaptability in its funding technique and processes has enabled us to ship peak efficiency, and we’ve got additionally leveraged the power of our greater than 250 funding professionals who’ve managed with diligently the portfolios and brought proactive motion.

“Sturdy teamwork and a digital infrastructure have allowed us to seamlessly adapt to new working requirements,” stated Ahmad Badri.

The EPF has additionally rebalanced its funding portfolios based mostly on an in-depth examination of how the COVID-19 pandemic and world uncertainties such because the November 2020 US presidential election, the persevering with commerce dispute between states- United and China and the affect of Brexit negotiations had influenced monetary markets. worldwide.

EPF funding portfolio in 2020

Following the decline in web contributions through the yr, EPF’s capability to adapt to the present instances has enabled its investments to generate long-term sustainable returns beneath the brand new normal.

Of the best gross funding revenue of RM 60.98 billion, RM 6.15 billion was allotted to Simpanan Shariah. The nice efficiency is as a result of cautious strategy guided by the Strategic World Asset Allocation (SAA) of the EPF, which maintained the resilience of the EPF regardless of the unexpected disaster.

By asset class, mounted revenue devices represented 46% of investments, whereas equities represented 42%. Actual property and infrastructure in addition to cash market devices accounted for five% and seven% respectively.

“The EPF is a long-term investor and stays trustworthy to our program of diversification throughout asset lessons, methods, managers, markets, international locations and currencies. The contribution of belongings overseas was additionally important to our efficiency, ”defined Ahmad Badri.

The fund’s complete funding in all asset lessons exterior of Malaysia represented 33% of its total funding. International shares generated complete revenue of RM 28.71 billion, whereas personal fairness portfolios confirmed sturdy efficiency with constant revenue distribution.

Whereas the key inventory indexes misplaced as a lot as 40% within the first quarter of final yr, the EPF took the chance to rebalance its portfolios and bought basically sturdy shares at enticing costs. The restoration within the second half of 2020 on the again of bettering world and home markets conbroadly praised EPF’s funding portfolios, offering alternatives for revenue taking, particularly within the fourth quarter.

The EPF has taken prudent steps to put in writing down RM 7.71 billion of its listed fairness portfolios, to make sure that the fund’s long-term funding portfolios stay wholesome.

Throughout the yr, the EPF carried out a number of withdrawals, specifically the i-Lestari and i-Sinar amenities, which required a strong liquidity plan. Consequently, the cash market portfolio has grown considerably to cowl all withdrawals. The cash market portfolio generated a strong revenue of RM 1.19 billion.

With almost half of EPF’s complete asset allocation in mounted revenue devices, comAppreciating Malaysian authorities securities and equivalents and loans and bonds, the fund managed to keep up secure yields and on the identical time seized alternatives to earn income as a consequence of falling rates of interest.

The portfolio revenue amounted to RM 25.42 billion, or 42% of EPF’s complete gross revenue. The actual property and infrastructure portfolio delivered RM 5.66 billion regardless of foreclosures measures and work-from-home requirements. The portfolio remained a key funding as an inflation hedge with a diffusion of round 50 foundation factors above mounted revenue devices.

EPF’s total funding belongings grew 7.9% to RM998 billion because the market worth reached RM1.02 billion on the finish of final yr. The variety of EPF members additionally elevated by 2% to 14.89 million members, whereas the employers registered with the EPF stood at 534,398.

With the rise in membership, the EPF was anticipated to generate RM8.25 billion for paying every 1% dividend for Simpanan Konvensional and RM972 million for every 1% dividend for Simpanan Shariah in 2020.

EPF’s responses to the laborious instances of 2020 – economic system, markets, jobs, COVID-19

The EPF has additionally carried out a number of key measures to assist members and employers cope with money move points following the motion management order from March 18, 2020 to Could 12, 2020, when most sectors economic system have been closed.

In reality, the EPF was one of many first pension funds on this planet to supply help to its members through the pandemic, deploying the hassle-free iLestari Account 2 withdrawal system to supply monetary help to members. Thus far, a complete of RM18.1 billion has been withdrawn by 5.16 million members beneath the iLestari facility.

Different measures embody permitting members to cut back their obligatory statutory contribution from 11% to 7%, efficient from April 2020 to December 2020. The EPF has additionally ensured that employers can bear their prices. and proceed to retain their staff by providing the employer’s COVID-19. Help program (eCAP), particularly aimed toward small and medium-sized enterprises (SMEs). eCAP affords eligible SMEs the chance to request a deferral and employer restructuring of EPF contributions. The measure benefited 13,090 employers for a cumulative worth of RM 84.95 million.

To make sure the protection of our staff and members, EPF rapidly tailored to the brand new actuality of “low contact, excessive distance” service with the introduction of Janji Temu On-line (JTO).

By JTO, EPF ensured that social distancing measures and SOPs had been strictly noticed whereas the variety of guests was decreased to our bodily branches.

Outlook for 2021

Commenting on the outlook for the yr, Ahmad Badri stated: “The rollout of the vaccine in 2021 can have a big effect on the outlook for the yr, as we’re additionally conscious of recent strains of COVID-19 which might be simply transmitted.

“Nevertheless, we consider the scenario is nicely managed, with governments everywhere in the world guaranteeing that vaccines attain the individuals as effectively as doable whereas in Malaysia the primary batch of vaccines has arrived and will probably be administered quickly. To the inhabitants.

“The EPF, as a 70-year-old establishment and one of many oldest pension funds on this planet, will stay centered on our mandate to assist members have sufficient financial savings for sustainable retirement.

“We may even embark on a brand new opt-out program to permit members to buy insurance coverage or Takaful merchandise that was introduced within the 2021 funds, anticipated by the tip of the yr.

“We’re additionally happy to announce that EPF is the primary institutional investor to determine the most important Sharia-compliant Non-public Fairness co-investments. mandate on this planet, with the launch of the $ 600 million Shariah Non-public Fairness separate managed co-investment account, ”he stated, including that the initiative bodes nicely for FP’s Simpanan Shariah fund. , by which members’ financial savings steadiness exceeded RM100 billion. model and continues to develop sustainably.

Thus far, 1.12 million EPF members have opted for Simpanan Sharia Regulation, which was launched in 2016. The initiative was launched in response to members’ requests to have their financial savings managed and invested within the ETH. ‘EPF in response to the rules of the Sharia.

“The COVID-19 pandemic has been the massive eye-catcher for all of us, requiring pressing options inside a brief time frame.

“As we work to safeguard and develop our members’ retirement financial savings in a risky and unsure setting, our give attention to environmental, social and governance (ESG) investments will function a focus. ‘An anchor and efficient danger mitigation software, whereas being beneficial drivers of our investments that may create a social affect that would final past monetary returns,’ added Ahmad Badri.