Media Statement by Centre For A Better Tomorrow Co-President Gan Ping Sieu On the Employees Provident Fund's New Syariah Scheme

The Employees Provident Fund's (EPF) decision to introduce a Syariah EPF scheme will create long-term problems for contributors and the country. The state-backed pension fund had announced earlier this week that registration for the Syariah EPF scheme would be opened on Aug 8 this year.

With two parallel schemes running, it is likely that their dividends would differ from time to time. This would create a sense of injustice among contributors, which could take a racial-religious dimension. Inevitably, there will come a day when Malaysian employees' retirement savings are determined by the religion they profess in.

The existing EPF scheme will further be perceived as making non-halal or haram investment returns by comparison or implication. This is not healthy in a plural society where we should embrace diversity and not allow our religious differences to further divide us.

The EPF is set up as a pension fund. It is EPF's statutory duty to maximize returns for contributors based on sound investment policies. It should stick to doing this, although the fund may choose to stay clear of alcoholic beverages and gaming counters. Beyond this, it is not EPF's duty to introduce a religious dimension into its investment decisions.

We live in a multicultural society that can do without further division, especially in the name of Syariah compliance. Overzealous implementation of policies in the name of Syariah compliance can be self-defeating and enhance the already yawning racial-religious divides in our society. That also harms the maqasid Syariah (the purpose of Syariah principles) that Islam aims to achieve.

In this respect, EPF should rescind its decision to introduce a Syariah EPF scheme and work towards maximizing returns for all contributors. It can choose to stay away from investments in the gaming or alcoholic beverages industries. Having only one scheme for all contributors is fairer and just.