THE Employees Provident Fund’s (EPF) total investment income grew 25% year-on-year to RM34.05 billion in the first half (H1) of this year.

Total gross investment income for the second quarter (Q2) was, however, lower at RM14.77 billion against the RM15.12 billion recorded in the same quarter last year, the retirement fund said.

Chief executive officer Amir Hamzah Azizan said EPF delivered a resilient performance in H1 2021, driven by the progressive recovery of equity markets and most asset classes amid the global rebound.

“Equities continued to be the main contributor of income for Q2 2021 at RM7.89 billion, accounting for 53% of total gross investment income,” he said in a statement today.

During the quarter, RM210 million was written down for listed equities, compared with RM1.66 billion in Q2 2020, following the continued recovery across global markets. The cost write-downs are part of the fund’s internal policy to ensure a healthy portfolio.

EPF said after netting off these write-downs, it recorded RM14.56 billion in investment income in the quarter, up 8% from RM13.46 billion a year earlier.

Fixed income instruments contributed RM5.28 billion or 36% to the gross investment income in Q2 2021, down from the RM6.17 billion recorded in Q2 2020 due to lower trading gains.

EPF said its diversification into different asset classes, markets and currencies continued to provide income stability and added value to its overall return.

As at end-June, its investment assets stood at RM989.14 billion, of which 37% was invested overseas.

On i-Sinar and i-Citra facilities, EPF has to date disbursed of RM67.6 billion to assist members affected by the Covid-19 epidemic.

On the outlook for the remaining half of the year, Amir said the country’s recovery prospects are dependent on how the Covid-19 situation plays out in the near term.

“While we are confident that the government’s various stimulus packages and initiatives will keep business sentiment strong and boost domestic demand, we are very concerned about the retirement security of the people, especially with 46% of EPF members below the age of 55 having less than RM10,000 in their account,” he said.

“Covid-19 has led to a significant drop in the percentage of members meeting the basic savings threshold (RM240,000 at age 55) from 36% to 27%, pursuant to the Covid-19-related withdrawals to supplement their income during the crisis.”

He noted that the epidemic has also triggered a dramatic rise in the number of gig workers in the country.

“While that has helped workers survive, many of them are falling back on their retirement security due to the irregular and unstable income,” he said.

“Additionally, they are facing vulnerabilities in terms of employees’ benefits and coverage on social protection.”

He said the key element of EPF’s strategy going forward is to get the gig workers as well as those in the informal sectors into its scheme so they can start to save as early as possible and plan for their retirement. – Bernama, September 24, 2021.