THE Employees’ Provident Fund (EPF) will have to sell its assets and rebalance its portfolio to raise funds for depositors who are looking to withdraw from their Account 1, reported The Malaysian Reserve.

EPF is estimating that some RM45 billion will be taken out by contributors through both the i-Lestari and i-Sinar emergency schemes.

The retirement savings fund lost RM8 billion over the past eight months due to the reduction in contribution, while another RM9 billion in losses has been projected for 2021.

This has resulted in a cash flow implication of RM60 billion.

EPF CEO Tunku Alizakri Raja Muhammad Alias, however, did not provide details about the liquidation plan, adding that the fund will look at assets that “best suits” its long-term strategy.

The fund will tomorrow release details on how members can access and withdraw from their Account 1 from January 1 to December 31 next year.

This i-Sinar initiative is to further ease the financial burden of EPF members who have lost their jobs during the pandemic.

It is expected to benefit 2 million members with an estimated advance of RM14 billion to be made available.

Meanwhile, chief investment officer Rohaya Mohammad Yusof said the fund started the asset sell-off plan in March, to ensure that it has sufficient funds.

“For now, it is just a matter of enhancing the strategy, meaning (we will look at) whether there is a need to rebalance our assets.

“As far as we are concerned, the strategic asset allocation will continue to be the prime driver. We are also very cognisant about any impacts to the market,” Rohaya said.

Tunku Alizakri also declined to elaborate on EPF’s dividend pay-outs for 2020.

However, he said the pension fund will keep its mandate to deliver at least a 2.5% nominal dividend and beat inflation by about 2% on a rolling three-year basis.

EPF declared total dividends of RM45.8 billion for 2019, which was lower than the RM47.3 billion declared for 2018 and the RM48.1 billion announced for 2017.

Of this, RM41.7 billion (5.45% dividend) was for conventional savings and RM4.14 billion (5%) for shariah savings. – November 17, 2020.