Wednesday August 30, 2006
Know risks when using EPF money for investment
PUTRAJAYA: Employees Provident Fund (EPF) contributors taking out their money for investment should realise the risks involved, said Second Finance Minister Tan Sri Nor Mohamed Yakcop.
“All EPF contributions are guaranteed 2.5% (in dividends),” he told a press briefing yesterday.
“However, there have been groups lobbying for more flexibility, and part of that money has been invested in unit trusts.
“We will be happy if people keep their EPF contributions (within the EPF).”
Earlier this month, EPF chairman Tan Sri Halim Ali said the Fund viewed seriously the losses suffered by its members and had asked fund management institutions to tighten the process, procedures and management of investment risks.
The EPF’s investment scheme was introduced in 1996 upon the insistence of a group of members in the wake of encouraging conditions on the stock market.
Seeing that the investment in unit trusts had a relatively high risk, the amount of funds that could be withdrawn was limited to only 20% of savings in Account I that exceeded RM50,000.
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