Thursday February 9, 2012

Retirement savings invested wisely, EPF assures members

PETALING JAYA: The EPF is not providing loans for individuals to purchase homes for a low-cost housing scheme in Kuala Lumpur.

It has also not approved a RM1.5bil loan as previously claimed. Instead, it is giving an initial RM300mil loan to the Government with strict conditions outlined to protect workers' money, it said yesterday.

“The EPF would like to assure its members that all loans provided to the Government or its agencies are made on commercial terms and with appropriate security to protect the interests of our members.

“We are always mindful of members' concerns and would like to reiterate that their retirement savings are invested prudently,” said EPF deputy chief executive officer and investment head Datuk Shahril Ridza Ridzuan.

It was previously reported that the EPF would channel RM1.5bil to the Federal Territories Foundation as part of a special funding scheme to help eligible buyers purchase public housing units in the city.

Consumer groups had objected to the use of EPF savings to fund public housing projects, stating that the risk of payment default would be high and that the EPF would not be able to make a profit.

Yesterday, Pakatan Rakyat MPs met Shahril Ridza at the EPF office in Kuala Lumpur to hand over a memorandum and get an explanation over the purported RM1.5bil loan.

Petaling Jaya Utara MP Tony Pua said the EPF had cleared previous concerns with its detailed explanation on the loan.

Shahril said discussions were ongoing with the FT Foundation's special purpose vehicle.

He added that Kuala Lumpur City Hall (DBKL) would buy back the houses to secure the cash flow required for the repayment of the loan in the event of non-payment.

“The terms of the loan agreement are within the risk appetite of the EPF as it is secured against assets and cash flow with a suitable guarantee on the repayment of the loan made.

“Based on the terms and the security arrangements that we have put forth, the EPF is well protected and the annual 5.5% profit rate imposed on the loan is fair,” he said, adding that all housing units would be assigned to the EPF.

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