KUALA LUMPUR (Aug 14): The government is fully confident in the Employees Provident Fund’s ability to make appropriate decisions, Finance Minister Lim Guan Eng said today in response to concerns that the current global economic situation could pose a risk to the retirement fund’s investments.
“We are confident that if there is any risk to EPF’s investments, they would do the necessary to ensure that returns are guaranteed,” Lim said at the Dewan Rakyat.
“EPF plays its role well in ensuring good returns and high dividends. There is no controversy in their performance,” he added in reply to a question from Datuk Seri Dr Adham Baba (BN-Tenggara).
Adham had asked if the government would consider restructuring EPF’s portfolio, due to prevailing slow market conditions and political uncertainties.
Yesterday, the ringgit fell to its lowest level since November last year, as the Turkish lira crisis intensified. The free fall in the lira followed US President Donald Trump’s approval for metal tariffs on Turkey to be doubled.
The dispute between the US and Turkey revolves around continued detention of American pastor Andrew Brunson, who is on trial for espionage and terror-related charges.
Referring to the crisis and its effect on the local stock exchange, Lim said EPF would know what to do best, adding there would be continuity in the decision-making process after Tunku Alizakri Alias takes over as EPF’s chief executive officer on Aug 20, considering it is an internal appointment.
Alizakri replaces Datuk Shahril Ridza Ridzuan, who has been named as the new managing director of Khazanah Nasional Bhd.
Earlier, Adham asked Lim to state immediate measures which the government would take in overcoming the RM6.09 billion “loss” experienced by EPF in a month.
Lim reiterated that the loss was a result of the rise and fall of share prices on the stock market, which is influenced by the economy, good financial management and a stable political environment, internally and externally.
“If we look at the book value of EPF’s shares, EPF still earned a profit as a whole. However, those shares were not sold, so the profit was not recorded and it is (actually) unrealised gains,” he added.
To a question by RSN Rayer (DAP-Jelutong) as to whether EPF contributors are affected by the RM3 billion loan given by the fund to 1Malaysia Development Bhd’s units Panglima Power Sdn Bhd and Jimah Energy Ventures Sdn Bhd, Lim said there should be no worries, as the loans are guaranteed by the government.