Registration for EPF's Simpanan Shariah option opens on Aug 8

The Employees Provident Fund (EPF) will open registration for its new retirement savings option, Simpanan Shariah, which will be launched next year, to members this Aug 8.

CEO Datuk Shahril Ridza Ridzuan said EPF has allocated an initial fund size of RM100 billion, which is equivalent to about 15 percent of the entity's total investment asset of RM681.71 billion as at end-March 2016.

"Members who choose to convert their current EPF account, which will now be termed as Simpanan Konvensional, to Simpanan Shariah will need to personally go to any EPF branch with their identification card to verify their thumbprint.

"To be eligible for Simpanan Shariah 2017, members must submit their application by Dec 23, 2016 and subject to the availability of the RM100 billion fund," he said in a statement Monday.

Shahril said the EPF's venture into Islamic investments is not new as more than 45 percent, or RM295 billion, of EPF's total investment assets are already Shariah-compliant.

"Moving forward, we expect to grow our investment in Shariah assets by at least RM25 billion a year on average, or in tandem with the total asset growth in order to maintain a minimum of 45 percent Shariah assets," he added.

In compliance with Shariah principles, the EPF said the dividend rate for Simpanan Shariah will be based on the portfolio performance of Shariah-compliant investments and will not have any guaranteed minimum dividend.

"A Shariah Advisory Committee (SAC) has been formed to oversee all operational, investment and governance aspects of Simpanan Shariah.

"The SAC will also recognise Shariah investment products as regulated or approved by Bank Negara Malaysia and the Securities Commission Malaysia," it said.

The EPF's Simpanan Shariah is a new savings option for members who wish to convert their current conventional EPF savings to one that is managed and invested in accordance with Shariah principles.

Based on the Members' Consultation exercise carried out last year, EPF found that more than 70 percent of the survey respondents agreed that there should be an option to have their retirement savings managed according to Shariah principles.