Small matter if EPF makes less money this quarter compared to corresponding or preceding quarter. Key thing is they are still making money!
If they are making actual losses, then it's not cool!

Does anyone know how the EPF accounting is done?

Are these realised profits?

And what about those shares which are underwater? Are provisions taken to reflect the losses?

Just wondering

This MYR6.78 bil is the Lowest qtr in the last 17 qtrs except one, ie the 1Qtr13 whihc was 5.6bil.

Doesn't look good considering the last qtr being NMYR9.58bil.

Msia economy slowing down this year

So expect a big haircut on dividends this year

Noted. Thanks for the highlight.

Read here http://www.kwsp.gov.my/portal/documents/10..._FINANCIALS.pdf

The technically correct answer would take too long to write. The short answer is, the unrealised profits are not entirely reflected in the profit after tax used to distribute dividends to contributors

The good news is, over the years there were unrealised profits built up; so although the last 2 years there were unrealised losses, it's not a situation like Tabung Haji yet

But to be fair... does anyone even care other than the beancounters?

This post has been edited by dasecret: May 25 2016, 04:21 PM

True also,... it sill does not mean that if you put the money somewhere, it can't disappear,...

As a shareholder, Yeah i am interested how well my fund is doing. No?

You put into EPF, you're afraid someone may take it all.

But of you put into investments, the investments can fail too.

So,... I diversify, you invest and put some in EPF. It is silly and equally naive to think that the EPF is the only dangerous vehicle in this world, and totally ignorant and uninformed to think that when one speaks of EPF, he is only keen to hold his money is cash.

In that case you should read the annual report. In fact, read and share your findings here

Hansel if only he know.

bwhahaah - yeah, if only our burger lover knows

momma told me not to argue with idiots,
they'll drag me down to their level & beat me with experience in idiocy


Also funny is when people with broken English is pointing out other's level of English proficiency.
Self-proclaimed "Master of the Universe" with land and property

sigh.. damn.. i hope i didn't sound like that when i was his age

This post has been edited by wongmunkeong: May 25 2016, 05:45 PM

i will when i have the time, which is kinda of a luxury at the moment

Hi Mr Burger, what a great fortune u made in a young age...

But Mr Hansel has his point, where, different people has different risk appetite. we cant simply judge a person just because we have different investment/saving pattern.

and..since u are so good at investing your fortune, if you dont mind, could you please share the tips here.

Sometimes i worried too~~
but thinking of the tax exemption from the epf..so..effective saving could be more..

Secondly...withdrawing money from acct 2 to reduce money in epf...for housing loan or study.

comparing to savings acct, and the inflation rate, somehow, epf is quite safe...

above is my naive idea....

and dont forget the ponzi scheme of epf style... somehow there are always new comers..

Boss, there are many types of investment held by EPF. Yes, they are realised profits (interest, dividend, trading capital gain, rental etc). For losses, I guess you are interested to know EPF's investment in stock market whether they recognise unrealised losses ? Ie. if share price drop below their purchase price, do they recognise paper losses ? Short answer is "yes"

To have a better perspective, let's look at all the investment assets EPF is holding, then we can have a better idea overall :

1. Available-for-sale financial assets RM340b 45%
2. Held-to-maturity investment assets RM220b 30%
3. Loans, Advance and Financing RM100b 13%
4. Others (properties, Bank FDs etc) RM90b 12%

Total = RM750b

1. This is what you are interested to know -- the equity investment in stock market both domestic and overseas, quoted and unquoted. They are stated at fair value (market value if quoted) with the gain/loss eventually be recognised through either P&L or reserve

2. Mostly MGS, which has no impairment. For Private Debt Securities, the usual impairment is recognised

3. Mostly loans given to entity not quoted in active market through both EPF and its subsidiaries (including guaranteed loans and islamic loan). Impairment are recognised too

4. Mostly property investment and FD/Bank deposits. If there is an impairment in property investment (determine by property valuation report), then the losses is reflected. No impairment for FD/Bank deposits.

For forex, the gain/loss for the assets are taken into account at spot rate at year end. So, yes, they take in the forex gains and losses too (recognised forex gain in 2015 as expected)

Overall, yes they recognise losses/impairment when necessary and probable. In fact, they have very long and detailed accounting policy on the basis of recognising the loss/impairment. But there are some assets which losses/impairment are not applicable like MGS and local currency FD

Above is my quick read on the report. Anybody please feel free to add/correct the above extract

Actually the investment section disclosed the asset allocation

"As at 31 December 2015, a total of 51.1% of the EPF’s investment was invested in fixed income instruments, 43.8% in equity investments, and the remaining 1.9% and 3.2% in money market instruments and in a on asset class respectively."

And the foreign allocation is 25%

Another thing to add is, impairment charge goes through income statement while the changes in fair value of equity goes thru OCI. You may ask what is the difference. The profit after tax distributed to contributors is determined after considering the impairment charges but before considering the fair value losses in equity.

As mentioned in previous post, the non-distributable AFS reserve is still in the blacks from previous years unrealized profits although this year there is a 6billion unrealized loss. But to be fair, 6b loss is not that much considering the total equity portfolio and it is half of 2014 losses.
It's actually performing better than some of the MIS approved funds out there

Just to clarify, what is OCI ? How is the accounting of changes in fair value of stock investment carried out ?

Does it work this way ?

1. Impairment (more permanent in nature) - charge to P&L
2. Loss in acquisition cost vs market price (temporary in nature) - charge to reserve, not affecting current year P&L

Show!

Thanks for sharing! It's good to know that EPF uses good and transparent accounting for its shareholders.
The above is a big help to understanding how EPF delivers its figures.

OCI - Other comprehensive income, or in this case, other comprehensive losses; page 110. It goes into the available for sale reserves in statement of changes in members fund on page 112

Yeah, 1 goes to P&L and 2 goes to a non-distributable reserves

With the reduction of income in Q1/2016, hope EPF can target at least 6% dividend income for tis yr