I don't know if we have a 'KWAP' thread,.. but a news below that is worth looking at :-

February 16, 2016:

Malaysian civil service pension fund Kumpulan Wang Persaraan (Diperbadankan) (KWAP), or Retirement Fund Board, is believed to have achieved a lower gross return on investment (ROI) of 5.5 per cent to 5.7 per cent last year, CEO Wan Kamaruzaman Wan Ahmad told a local weekly.

The Edge Malaysia Weekly reported that while the full 2015 financial results of the fund have yet to be released, Ahmad said the performance is expected to dip from its previous years as the fund’s investments were not spared from the volatility seen in the equity market last year.

Malaysia’s equity market saw negative return for the second consecutive year, which could likely sway KWAP from achieving its ROI target of 6 per cent.

“The Malaysian equity market was in negative territory last year by about 3.9 per cent. After two consecutive years (of negative performance), the overall performance was quite poor. I think last year, we did not achieve the above 6 per cent (target). We probably reached around 5.5 per cent to 5.6 per cent, or slightly higher than that,” he said of the gross ROI target.

In its 2014 annual report, KWAP recorded an average gross ROI of 6.68 per cent between 2010 and 2014.

KWAP’s fund size stood at MYR109.43 billion in 2014, and Ahmad expects it to grow to MYR120 billion this year.

The FBM KLCI fell 3.44 per cent in Malaysian Ringgit terms last year but plunged 20.96 per cent in US dollar terms. The broader FTSE Bursa Malaysia EMAS Index slid by 19.8 per cent last year, tracking the benchmark index.

The poorer performance of KWAP’s investments is a concern. The retirement fund needs to grow its investments in order to shoulder at least half of the civil services’ pension liabilities, given that the federal government’s contribution to the fund isn’t much, The Edge reported.

The government is supposed to transfer an amount equivalent to 5 per cent of the yearly emoluments budget to KWAP. Its contribution to the fund from 2011 to 2014 has stagnated at MYR1.5 billion.

Last year, the federal government’s emoluments budget was MYR69.1 billion. Based on this, KWAP should have received MYR3.5 billion from the government. Instead, the fund was given about the same amount as in 2014, Ahmad said.

Noteworthy is that growth in the annual pension payments far outstrips KWAP’s investment performance.

Based on the pension fund’s 2014 annual report, 9.35 per cent of its assets was invested overseas while the rest was placed locally.

The government has given KWAP its approval to almost double its international investments to 19 per cent of its portfolio by the end of next year, from the current level of about 10 per cent.

However, with the Ringgit’s depreciation against the US dollar, KWAP may only achieve the 19 per cent target after 2017. Recently, the government has also called for government-linked funds to limit investments abroad.

Nope Hansel don't have KWAP thread here

anyhow I wonder how "good" is the rate

Technically when we say good, then it must be refering to previous year dividend payout. So good means slightly more..

Happy ?


This post has been edited by magika: Feb 17 2016, 04:07 PM

maybe 6.80??

If true, PM me your bank ac no and I will supply 1 month worth of Star Buck coffee! Ha.

sometime we cannot believe what they say also.

they say good rate, lastly give 6% only tell whole Malaysia, it's "good rate" with current weak economy & MYR. No other retirement funds gonna give like that rate. ask to compare with CPF Singapore

Actually why does the rate of return of KWAP is? Government servants get what we called defined benefit plan, where the benefit received is fixed, if KWAP doesn't make as much as they need, government has to top up the amount so that the benefit that the pensioners get is as promised

Where as EPF is what we called defined contribution plan, where the contribution is fixed (11% + 12%), and you get back contribution + dividends over the years. So how much returns EPF get would be critical for contributors.

The only thing I can think off for KWAP is, if they get very good returns maybe the government would revised upwards the benefits to be paid. I doubt they would revise it downwards when KWAP don't do well... it would cause too much uproar

not sure how much is the Rate of return on KWAP but I know gomen is trying their level best to reduce the amount allocated for pensioners & try to get fully from KWAP alone without gomen toping up the amount. something like self sufficient

KWAP and KWSP need to be synchronised in their returns. ...

Edited : IT's hard to pronounce the 'KWAP' in short,... 'Quack' ??? Doesn't seem nice,....

This post has been edited by Hansel: Feb 17 2016, 07:06 PM

Poor response for 3% EPF cut


- See more at: http://www.mysinchew.com/node/113132/tid=1...h.w4XDzdBu.dpuf

Another failed initiative by Govt

Of course they want that, then government don't have to fork out money in annual budget to meet the pension liabilities. But whether KWAP is in the position to do so, I have no idea

I pronounce it in Malay, sounds like 'kuap'
Why shd KWAP n KWSP synchronize their returns? They r 2 separate government linked investment bodies. Of course we shd encourage a 'healthy competition' between them. But syncronise would suggest either over/under declaring rate of returns which would not help anyone at all

Reduction in EPF contribution will only affect those previous 11% group while those contributing above statutory requirements will be maintained without the need to fill the form.

'Kuap' and KWSP are supposed to help out in old age requirements, ie for retirement. They have the same objective, ultimately. Hence, under a good governance environment, if the Gov't can introduce 'Kuap', shouldn't these two initiatives provide equal returns, EVEN if they compete under normal conditions ? Why should one give more than the other ?

It's something like the Syariah-compliant KWSP scheme coming next year, and the non-Syariah one,...what if one gives more than the other ?

In a good governance environment, the methodology to adjust the returns in the right way, eg by rebalancing their investment portfolios should be executed correctly to provide fair and equitable returns to contributirs. Both instruments are for retirement-planning.

This is my opinion between KWAP & KWSP:

I) KWAP is what we termed defined pay-out scheme. This means that come rain or shine, KWAP must pay out the a definitive cash flow to its beneficiaries. In this case it is usually a % of last drawn salary until the beneficiary attain mortality (sampai mati!)

II) KWSP is termed defined contribution scheme. This means that come rain or shine, KWSP members must contribute a definitive amount of cash-in to KWSP until a certain age. In this case it is (11% + 12% of last drawn salary) until age 60.

III) KWAP ROI is of no consequence to its beneficiaries; meaning, ROI good or bad... you still get the same fixed income. If KWAP get good return; to the beneficiaries... it is only a "syiok sendiri" news.

IV) KWSP ROI is slightly better news to its members because based on historical trend, when its ROI improves, the dividend declared trend higher despite members putting in the same amount of contribution.

Xuzen

p/s Perhaps it is coincidental, but I do notice that of the big govt investment arm.... two of them that has bad publicity are helmed by UMNO office bearers (case in point: FGV by Isa & LTH by Rezeez).

KWAP is supposed to slowly takt over the goverment pension payout. They are free to speculate and invest freely without restriction which the government cannot do. I will bet it is not answerable to parliament.

Thank you for the clarifications. Just for discussion-sake, so which is better,... KWAP or KWSP ?

KWAP is of no direct concern of anyone except the goverment as its duty is to make money in order to slowly take over the goverment pension commitment. Its of no point discussing it.

It will be a good reference point to gauge on the performance of the KWSP because the Gov't would want the civil servants to enjoy the best of benefits. We all know how much this Gov't is on the side of the cvil servants.

still no news on dividend % ?