KUALA LUMPUR (June 11): The total exposure of the Employees Provident Fund's (EPF) financing portfolio in government-linked companies (GLCs) as of March 31, 2015 was RM77.99 billion, said Finance Minister Datuk Seri Najib Razak.

"The financing exposure of EPF to the GLCs is in the form of fixed rate loans and bond/sukuk subscriptions that are partially backed by asset mortgages, government guarantees and bank guarantees.

"EPF's investment in 1MDB (1Malaysia Development Bhd) was limited to RM200 million and has government guarantee," Najib said this in his written reply to Shah Alam MP Khalid Abdul Samad at Parliament.

Khalid had asked Najib to state the list of the usage of EPF funds for the financing of GLCs such as Pembinaan PFI Sdn Bhd, 1MDB and Felda Global Ventures Bhd, and the total amount that have been used.

He also asked Najib whether it is the reason why EPF is unable to pay lucrative dividend to contributors as well as needing to buy 50% of Malaysian Government Securities (MGS) that has low investment returns of around 4% and 5%.

EPF's exposure to Pembinaan PFI stood at RM25.29 billion, said Najib.

To recap, the Auditor-General reported that at the end of 2013, RM18.6 billion from the original RM20 billion loan from EPF had been spent by Pembinaan PFI.

But Najib in replying to Khalid's question on the usage of FGV, he told Parliament that EPF has so far not given any financing to FGV.

Najib also said that more than 50% of EPF's investments are invested in fixed income instruments that comprise Malaysian Government Securities and level coupon bonds that include loans and bonds for both mandates.

Therefore, EPF's returns are naturally influenced by interest rate movements and inflation, he added.

Seeing that the inflation rate has been on a rising trend since 2009, Najib opined that EPF has continued to invest and further diversified its investments in inflation asset class and inflation linked investments comprising real estates and infrastructure that is guided by EPF's strategic asset allocation in efforts to create optimum returns with sound investment risks.