This is another touchy subject to write about especially when the topic involves Employees Provident Fund (EPF).
To start off, allow me to highlight figures from EPF Year 2012 withdrawals. In a news released by EPF dated 10th of July 2013, the total amount withdrawn from EPF by Malaysians in 2012 was RM32.98 billion, an increase of 10.3% as compared to RM29.90 billion in 2011. And according to an article from MySinChew, out of the RM32.98 billion withdrawn, RM6.64 billion were withdrawn under the category of "Investment Withdrawal".
This proves that the introduction of Investment Withdrawal Schemes by EPF have been well received by Malaysian as proven by the year to year increase in withdrawals. But what exactly is an Investment Withdrawal from EPF?
Let's take a look at the guideline provided by EPF;
- This withdrawal allows you to withdraw part of your savings in Account 1 for investments to increase your retirement fund to support your life after retirement.
- You are allowed to invest not more than 20% of the total amount in excess of your Basic Savings in Account 1 through the Appointed Fund Management Institutes approved by the Ministry of Finance.
With regards to the second statement from the Purpose section, Basic Savings is defined as;
"A pre-determined savings amount in your Account 1 according to your age to enable you to achieve a minimum savings amount of RM120,000.00 when you are 55 years old. The savings cannot be withdrawn until you are 55 years old."
The Basic Savings Schedule:
|Click to Enlarge|
List of Appointed Fund Management Institutes and Approved Funds for EPF Investment Withdrawal Scheme
In total there are 27 Fund Management Institutes which have been appointed by EPF for "Skim Pelaburan Ahli KWSP".
*Pheim Unit Trust Berhad has been suspended by EPF as of 25th August 2011
|1.||MAYBAN ASSET MANAGEMENT SDN BHD (IPD001)|
|2.||OSK-UOB UNIT TRUST MANAGEMENT BERHAD (IPD 002)|
|3.||PUBLIC MUTUAL BERHAD (IPD 003)|
|4.||AMANAH SAHAM SARAWAK (IPD 004)|
|5.||HONG LEONG ASSET MANAGEMENT BERHAD (IPD 009)|
|MIDF AMANAH ASSET MANAGEMENT BERHAD (IPD 012)|
|7.||TA INVESTMENT MANAGEMENT BERHAD (IPD 014)|
|8.||AMINVESTMENT SERVICES BERHAD (IPD 019)|
|9.||ASM INVESTMENT SERVICES BERHAD (IPD 020)|
|10.||PACIFIC MUTUAL FUND BERHAD (IPD 022)|
|11.||PERMODALAN BSN BERHAD (IPD 025)|
|12.||RHB INVESTMENT MANAGEMENT SDN BHD (IPD 026)|
|13.||AMANAH MUTUAL BERHAD (IPD 032)|
|14.||APEX INVESTMENT SERVICES BERHAD (IPD 033)|
|15.||CIMB-PRINCIPAL ASSET MANAGEMENT (IPD 034)|
|16.||AMANAH SAHAM NASIONAL BERHAD (IPD 035)|
|17.||AMANAHRAYA INVESTMENT MANAGEMENT SDN BHD (IPD 038)|
|18.||AFFIN FUND MANAGEMENT BERHAD (IPD 040)|
|19.||LIBRA INVEST BERHAD (IPD 042)|
|20.||MAAKL MUTUAL BERHAD (IPD 043)|
|21.||EASTSPRING INVESTMENTS BERHAD (IPD 046)|
|22.||BIMB INVESTMENT MANAGEMENT BERHAD (IPD 049)|
|23.||ALLIANCE INVESTMENT MANAGEMENT BERHAD (IPD 052)|
|24.||PHEIM UNIT TRUST BERHAD (IPD 053)|
(Nota: Perkhidmatan digantung mulai 25 Ogos 2011)
|25.||KUMPULAN SENTIASA CEMERLANG SDN BHD (IPD 054)|
|26.||HWANG INVESTMENT MANAGEMENT BERHAD (IPD 055)|
|27.||KENANGA INVESTORS BERHAD (IPD 056)|
The 26 active Fund Management Institutes offers a total of 206 Trust Funds for Investors to select from. Among the top performing EPF approved Unit Trust Funds that investors can choose to invest are:
EPF Approved Unit Trust Fund
Hwang Select Opportunity Fund
Equity Malaysia fund. Has returned 549.93% since its inception on 7th September 2001
Hwang Select Balanced Fund
No.1 ranked Balanced Fund in terms of returns over a 5 year period (as of 31st May 2013) according to Personal Money Magazine
Kenanga Growth Fund
No.2 ranked Equity Malaysia fund in terms of returns over a 5 year period (as of 31st May 2013) according to Personal Money Magazine
Hwang AIIMAN Growth Fund
No.2 ranked Islamic Equity Malaysia fund over 5 year period (as of 31st May 2013) according to Personal Money Magazine.
Winner of 2013 The Edge-Lippers Award for Best Islamic Malaysia Equity fund under the 5 Year Category
Eastspring Dana Al-Ilham
Winner of The 2013 Edge-Lippers Award for Best Islamic Malaysia Equity fund under the 3 Year and 10 Year Category
For full list of EPF approved unit trust funds, click HERE.
(i) A Malaysian Citizen; OR
(ii) A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
(iii) A Non-Malaysian Citizen who:
- Has become an EPF member before 1 August 1998; OR
- Has obtained a Permanent Resident status (PR).
You have not reached 55 years of age at the time the EPF receives your application; AND
You have Account 1 savings of at least RM5,000.00 more than the required basic savings amount
Frequency of Withdrawal
- Investment can be made at the intervals of three months from the date of the last transfer, subject to the availability of the required balance in Account 1
- Subsequent investments may be made with the same Fund Management Institutes or other approved Fund Management Institutes. However investment is only allowed with one Fund Management Institutes at any one time.
Investment Top-Up Using Own Funds
You are not allowed to top-up your investment using your own funds.
Investment Risk Liability
You are fully responsible for this investment. EPF will not be responsible for any loss incurred.
Annual EPF Dividend on the Amount Invested
You will not be paid dividend declared by EPF on any amount you have invested as this amount has not been invested by EPF
If An Approved Fund Management Institute Has Been Delisted
Your investment with the Fund Management Institute must be sold and the funds returned to EPF by that Fund Management Institute
Release of Controls on Investments
EPF will release its controls on your investment at the Fund Management Institutes when you reach the age of 55 years old or have withdrawn all of your EPF savings under the Leaving the Country, Incapacitation, Pensionable Employees and Death Withdrawals.
Claims or selling of the invested units will be handled by you/next-of-kin with the Fund Management Institutes.
Withdrawal Amount Eligibility
You can withdraw your savings as follows:
- 20% from your savings in excess of the Basic Savings amount in your Account 1
- The minimum amount for investment withdrawal is RM1,000.00
- The maximum amount cannot exceed 20% of the savings amount in excess of your Basic Savings
- Formula: (Account 1 – Basic Savings) x 20%
Tips on Investing into Unit Trust Via Your EPF
1. Considering that this is a long term investment between 10-30 years, it is highly advisable to invest into funds with proven track record in terms of total returns.
2. The amount for every EPF withdrawal is considerably large in comparison with regular cash investment. Therefore, finding a top performing fund is vital to ensure that the money you are investing in is working doubly hard for you.
3. Ensure that you continue to invest regularly (intervals of three months) to utilize the benefits of Dollar Cost Averaging.
4. If you are unsure/unclear/uncertain about how to start an investment Unit Trust via EPF withdrawal, please seek a professional and experienced consultant to assist you in terms of
- recommending a fund that suits your risk nature
- explaining the risk that comes with unit trust investing
- explaining the entire process of EPF withdrawal for investing
Tip number 4 was clearly highlighted in an article published by EPF dated 18th July 2013;
As our society become aware of the importance of long term financial planning, passive investment vehicle such as unit trust is being utilized to ensure that the potential annual returns (taking into account the risk involved) are able to beat the inflation rate. I believe most of us would like our retirement savings to passively work hard for us while we commit ourselves to important things in our life such as our family and career. Agreed?
Despite the allowance given by EPF for Malaysians to withdraw their retirement fund for investment, we as investors should play a role by putting additional effort especially during the initial stages before investing. Find out what is unit trust investing all about. Understand the risk. Seek answers from your consultant if you find that you're unsure of certain things. Grill them if you must. Search for the top performing funds that have proven track records. Ultimately take that leap of faith by investing long term and let the fund manager prove his or her credibility.
Last but not least, always remember that every effort that you've placed in investing would go a long way towards ensuring your retirement savings work the hardest for you!
Cheers and Happy Investing!
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Like to start your own EPF withdrawal for unit trust investment via the best unit trust funds in the market? Contact me at firstname.lastname@example.org.