Tighten procedures, EPF tells unit trust managers

PETALING JAYA: The Employees Provident Fund (EPF) has asked all 42 trust fund management institutions sanctioned by the Finance Ministry to pay more attention to EPF members’ investments in trust funds.

EPF chairman Tan Sri Abdul Halim Ali said in a statement that the Fund viewed seriously the losses suffered by its members who had invested in trust funds and had as a result sent a proposal to the Federation of Malaysian Unit Trust Managers asking fund management institutions to tighten the process, procedures and management of investment risks.

The proposal also called for the institutions to ensure that products introduced are more suitable for the target of savings for old age that did not pose too high a risk.

Institutions were also asked to make sure that their agents promoted products that fitted the profile of EPF members and explained clearly the risks that the investors would have to bear.

The EPF also called on the fund management institutions to reduce the investment management fee that they now charged.

Abdul Halim explained that the EPF’s investment scheme was introduced in 1996 upon the insistence of a group of members in the wake of encouraging conditions on the stock market.

He said that seeing that the investment in trust funds had a relatively high risk, the amount of funds that could be withdrawn was limited to only 20% of savings in Account 1 that exceeded RM50,000. <-- see... camne laa ada orang boleh claim habis semua duit EPF dia di keluarkan for this investment?? hmm... reporters! tolong la interview orang yang dah invested.. ni pi carik orang yang tak tau apa-apa pasal UT buek apo... :-)

He said members who applied to make the withdrawals were also told that the Government guaranteed 2.5% in dividends for their EPF savings whereas there was no guarantee for their investment in unit trust funds.

Abdul Halim said the EPF held annual meetings with FMUTM, which represented the fund management institutions, to allow it to monitor the performance of the institutions and call for the management of its members’ investments to be upgraded.

Cuepacs president Datuk Nordin Abdul Hamid said EPF members had the right to withdraw their funds, but they should be wary of the consequences. He said there were some who were misinformed about investing in unit trusts because agents tended to disguise the risks involved. <-- Datuk Nordin's answers was ok laa... members have the right... since it's their money what... :). yup, true... the agents should informed betul2... this is for middle to long term la people... come on... there are people out there who have made big money... but hey... sabar laa...

MTUC secretary-general G. Rajasekaran said the congress had opposed the move to allow EPF contributors to withdraw funds for investment purposes as far back as 1997. <-- tengok orang atas pagar camne dia komen. hehehe...

“Those from the private sector have only their EPF savings to rely on in their old age and should therefore be more careful with their funds,” he said.