Retirement Fund Act amendment sees BNM rep removed from Investment Panel

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KUALA LUMPUR (Apr 6): The Ministry of Finance has tabled an amendment to the Retirement Fund Act 2007 that will see the removal of Bank Negara Malaysia (BNM)'s sole representative from the Investment Panel set up under the law.

A new section was also added to penalise any person who sits in any meeting of the fund’s Board, Investment Panel or any of its committees who discloses any information which is not published.

Deputy Finance Minister Datuk Ahmad Maslan tabled the Retirement Fund (Amendment) Act 2015 for the first reading today.

The bill could be tabled for a second reading at this sitting which is scheduled to end this Thursday, or at the next sitting in May.

The Retirement Fund Act replaced the repealed Pensions Trust Fund Act 1991.

The Retirement Fund (Incorporated) or Kumpulan Wang Persaraan (Perbadanan) (KWAP) was established under these laws.

The bill will see amendments to section 7(2) of the Retirement Fund Act which provides for the membership of the Investment Panel set up under the Act.

The sole representative from the central bank will be removed from the Investment Panel, and the addition of "four persons from the public or private sector with experience and expertise in business, investment, banking or finance" to be appointed by the Minister of Finance.

Prior to the amendment, the Investment Panel consisted of seven members: a Chairman who shall be the Chairman of the Board or such other person as may be appointed by the Minister; a representative from the central bank of Malaysia; a representative from the Ministry of Finance; the Chief Executive Officer who shall be the secretary; and three other persons from the private sector with experience and expertise in business or finance.

A representative from BNM sits on the Board and Investment Panel currently.

The amendment came at a time when KWAP is under the spotlight for extending a RM4 billion loan to SRC International Sdn Bhd, a wholly-owned unit by the Ministry of Finance.

To recap, Pandan Member of Parliament Rafizi Ramli had disclosed that SRC International, formerly owned by 1Malaysia Development Bhd (1MDB), recorded a loss of RM164 million for the financial year ended March 31, 2014.

It also recorded an impairment loss on available-for-sale investment of RM115.25 million for the same financial year.

He is also mulling legal action against KWAP for its handling of the pension fund of the civil servants.

The other amendment include an additional Section 21A which seeks to punish any person disclosing any information whether obtained through sitting in a meeting or documents.

On conviction, the person shall be liable to a fine not exceeding RM100,000 or imprisonment for a term not exceeding three years or both.

The clause applies to any member of the Board, Investment Panel, committee officers and servants of the Retirement Fund (Incorporated) or any person who have access to the document relating to the affairs of the Fund, except for the purpose of this Act or for the purpose of any civil and criminal proceedings under any written law or where otherwise authorised by the Board.

The amendment will also enable the Retirement Fund (Incorporated) to act as an agent of the Government for the purpose of paying any pension, gratuity or other benefit granted under any written law from the Consolidated Fund, and it might be paid for the service.