Okay,... good that they are silent on the 'leftovers' after 55yo. I would urge the EPF to let us continue with the flexible scheme with whatever we have remaining inside the EPF account beyond 55yo.

'Flexible' means we can withdraw whatever we wished and whenever we wished,... and to continue earning the dividend on the outstanding (leftover) amount that we have inside the EPF Account.

BUT whatever new that we put into the account after 55yo will be subjected to locking-up till 60yo - then it's okay.

Fat chance ???

Edited by adding : I do hope our lawmakers cover ALL the scenarios of contributors and not leave any openings uncovered, leaving the interpretation to the executives. There is always the motive of advantage to the pension fund, or advantage to contributors of the pension fund in situations of amendments to pension fund acts like this.

This post has been edited by Hansel: Oct 21 2015, 06:39 PM

Now is still too early
B patience as EPF will release announcement on the details later

Hansel, from what I read, if you do not topup, you can withdraw anytime. If you topup at the age of 55 or more, you can only withdraw at 60. So the choice is yours. Topup and give away your rights to withdraw or don't topup and have the flexibility to withdraw anytime.

Anyway, it haven't been pass yet. Still being debated. For now, the old rules still apply.

Every month there is list of employee submitted together with the remittance, so if the ABC person account is KWSP-i, it will be credited into the ABC account automatically by EPF system. Just my logic thinking, as I see no issue from employer front.

When law is silent on particular issue, then it just means no restriction.

As far as the wording published, only contribution after 55 is "locked". It doesn't mention contribution before 55, so it won't be "locked".

No I cannot. I am only using banking sector products as a comparison. But at the same time, it is also not proven that it won't be so. I suppose we can only wait till it becomes a reality to see the end results. I do hope I am wrong in my perception because I prefer to see our funds being invested properly to yield proper returns, where the main objective is to ease many contributors future retirement plans.

I do not wish to see, Account A earning less than Account B or vice versa. Our retirement funds should not be used for that purpose. As it is, part of contributors account can be used to invest in certain unit trust. That is for the contributor to decide. The risk is theirs to make.

But if I am contributing RM500 a month in a conventional KWSP account, and another is also contributing RM500 a month in a Syariah Compliant (SC) account, it perplexes me if either one is given a higher dividend yield than another, doesn't matter which one is higher. However much KWSP chooses to invest based on their available funds and choices of portfolios of investments, the returns should be distributed equally and proportionately to the available balance of contributor. It should be looked at as a total return.

I understand that to some, people see KWSP as an investment model for them, because of the track record in recent years. But it has and should always be the objective of KWSP, to ensure the money they make, are fairly disbursed to contributors when they announce dividends. It would be alright if they collectively take contributions in conventional © account and syariah account, invest soundly, and the total returns are announced as dividends every year proportionately. It should not matter which account makes more.

However, Syariah Compliant accounts can only be invested in Halal (is that the correct term?) businesses only. Does that mean if the funds in C accounts in KWSP generates higher yield than the SC investments, those in SC will yield lesser dividends because they cannot accept profits that were made from investments made through non-Halal businesses?

Having said the above, if indeed dividends are equal regardless of accounts, then the above I shall retract and apologize for my wrong assumptions.

This post has been edited by McFD2R: Oct 21 2015, 09:47 PM

Folks,

Let's have a balanced view and ask ourselves a basic question.

So, with this change, EPF contributors are separated into 2 groups of account: Islamic compliant and non-Islamic complaint. The problem with that is what to do with the dividend yields of both accounts?? What is fair?? What happened if they are different??

Dreamer

Folks,

Duplicate post.

Dreamer

This post has been edited by dreamer101: Oct 21 2015, 11:16 PM

Well... in-line with what I said earlier, I do hope you are right, bro,...

But,...do you think the EPF will allow this to be for the advantage of the contributor ??

Edited by adding : For those who have large chunks sitting inside the EPF already, they will be earning a lot of dividends yearly. Will EPF allow flexi withdrawals for such individuals ?

This post has been edited by Hansel: Oct 22 2015, 08:42 AM

My Finance will have more work identifying which employee is in which scheme. And if the EPF allows scheme conversion for a contributor, then more ongoing work as time goes by.

But let's wait for more ann'ts,...

When silence is introduced for an act enactment or amendment, it is not good, especially for a society that is 'not perfect' and without integrity as in Msia. When interpretation is placed into the hands of individual decision-makers, then this gives rise to personal motivation. This opens up to possibilities of abuse, to the detrimental of the contributor.

You are interpreting as in para 2. The counter-girl at the EPF centre and her superior may interpret it in a different way, OR may wish to interpret it the way that he or she prefers. In Msia, I am not comfortable with 'openings in the law'.

Anyway, I too wish to interpret as in para 2,.... however, I really don't think it would be to our advantage. At the end of the day, either the official enactment itself will close this hole, or the EPF Office will interpret it to the EPF's advantage.

This is Msia...

No, you finance or HR won't need to do more work, apart from one time/first time for those wish to do the conversion.

It will/should be the same as old day afterwards.

That is my exact question, to which some have seem to either misunderstood or chooses to say that won't happen. If dividends are going to be equal, then I see no purpose for them to have a separate contributors accounts. Because returns from non-Islamic investments surely cannot be distributed to Muslim contributors. Isn't that the purpose of a Islamic account? If that is so, how can returns be equal? It can only be equal if the total returns from conventional account funds and Islamic funds, are combined and then divided proportionately. But as I've said, non-Islamic returns are considered non-Halal in some businesses. How can this returns be combined with the Halal returns?

This is just my assumption. Imagine if conventional contributors amounts to RM100 mil a year, and Islamic account contributors amounts to RM50 mil a year. If the Islamic accounts sees a higher dividend, then this is a failure in the KWSP investment portfolio. Or even if it was reversed whereby Conventional contributors are RM50 mil vs KWSP-i RM100 mil, and then conventional yields higher dividends. Either way, we would see a disadvantage in one of the account type if the dividend yields are not equal. KWSP should not be operating in such a manner in my personal opinion.

Until further information is revealed by KWSP if the tabling of the new act passes through, I fail to understand how this can be done fairly for all contributors.

The law tabled has mentioned potential 2 rates of return (if not mistaken), so possibility of different return is there.

If its conventional portfolio is performing better than syariah compliance portfolio, logically thinking, conventional account may get higher return and vice versa.
Just like conventional FD vs islamic deposit.

But it shouldn't be too far away, as bulk of investment of EPF is in MGS, while non-syariah compliance portfolio shouldn't be too high for equities currently. So the difference shouldn't be too great between them.

We shouldn't pre-judge anything, until EPF gives the clear picture.
While, I don't see too much issue in this matter.

There seems to be a lot of fear that the traditional KWSP may be less than KWSP-i or traditional KWSP contributors are forced to select KWSP-i.

But.. guys.. does this matter when it comes to yield whether they're syariah or not?
Non-muslims can also choose the syariah products if they give better yield, correct?

Why not just wait, and see how the rules turned out before deciding on the next action plan of changing your contribution or deciding when to withdraw (if you're near that 55 qualify age).

IMO, until FD yields better than EFF, even past 55, I would leave them in there and take out what is needed for expenses.

If contributors are NOT allowed to switch back and forth, then no additional work apart from the first round of switching-over from conventional to syariah-compliant. ...

Cherroy,

You know, the puzzling thing to me about syariah products - they just changed the verbiage of interests/dividends to profits sharing to be compliant with "islamic" products. If there are "profits", like any or businesses or investments, there are also risks where if there's a bad year, it could also mean "loses".

Do syariah products also allow "loses" to be shared with the members if business or investments go bad?

If so, imagine, one bad year - everything is in red (let say stock market tanks 50%) and with no min guarantee of 2.5% dividend yield (like the traditional KWSP), KWSP-i could have a negative yield.

This post has been edited by danmooncake: Oct 22 2015, 10:14 AM

Another question is : Are MGS Syariah compliant? I don't think so because it's interest based. So how can the Syariah fund engage in MGS?

I'll comment a bit here, bro,... your comments are based solely on financial returns, whereas the EPF would like to talk about religion too in their investing activities. They wished to be concerned in the afterlife too,...

Either they wished to be concerned in the afterlife too,... or they wished to attract more Mid-East investors to come to Msia.

i suggest that as with ASB and others, in Malaysia the only way this is going to work is to differentiate the two funds completely.

i have another question: Is it halal for Muslims to be handling non Syariah products?