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PETALING JAYA: The Employees Provident Fund (EPF) said it expects the additional outflow of retirements from members affected by the Covid-19 pandemic to have a “minimal impact” on their long-term returns.
The nation’s largest pension fund told Bloomberg that it had been expecting withdrawals since the outbreak earlier this year and had prepared for it by increasing its cash levels.
“In the event that the HBS has to rebalance its portfolio, it will examine its liquid assets to meet the withdrawal.
“It will be done in an orderly manner without disrupting the market and its own long-term investment strategy,” the financial news agency said.
EPF recently allowed taxpayers to make a one-time withdrawal of RM10,000 from their EPF Account 1, although there were certain conditions that had to be met.
This included workers who have not contributed to the EPF for at least two months and those who had suffered a minimum reduction of 30% in their base salary since March.
A second category of members whose total income has dropped by at least 30% since March are also eligible, but must show supporting documents to verify this.
But the ruling raised concerns that any major withdrawal by members would hurt EPF’s returns and a sale of its portfolio would weigh on the stock market.
However, EPF said its ability to invest is not limited to contributions “but is also determined by its investment income.”
“The impact of i-Sinar on EPF’s cash flow will depend largely on the takeover, which will vary based on individual needs,” he told Bloomberg.
