Basically, it reads as a pre-emptive statement. To let contributors know that, if you do not subscribe to the Syariah account, their obligation to you is minimum 2.5%, whereas it is possible that the Syariah account may yield higher dividend. Hence, contributors cannot claim foul when it drops from 6.x% to suddenly 2.5%.

That is another messed up system and another way for them to utilize our money, whereby they want all your money to be in the Syariah account. Or face the consequences of lower yield in the conventional account. They're saying, you non-muslims can enjoy lower yield if you don't want to place them in Syariah compliant account.

Yet another way to utilize the non-muslims contributions, to yield better returns but pay better dividends to the Syariah account contributors. Way to go Malaysia. Another milestone in the f****d up system.

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

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.

For now, probably so. But if in the event, the difference >1% consistently, that does make a difference especially when it is compounded every year till 55, or eventually 60. Hence my view is that all investments by KWSP should be wholly and collectively made in the fair interest of all contributors and divided equally and proportionately. Because unlike Banks, where we can have choices to decide whether to take up their products or not based on the T&C, EPF contributions are mandatory. We do not get a say on where and how they invest, and nothing to govern the returns if any, except for the minimum 2.5%. As such, all funds that are generating returns should be fairly distributed.

Ok lah, I think I've emphasized my points that it becomes repetitive. I do that some times

That is very true for those relying on their savings and EPF funds for living expenses after retirement.

I would not dispute that. However, if this is passed, does that means Muslims contributors MUST place in Islamic account, while others can choose? And then imagine if EPF declares that conventional accounts yields higher dividend, whether it's 0.1% or 1% than the Islamic account. Would those placing in Islamic accounts be making a big fuss about it then, especially here in Malaysia? I think they would. Thus, from that perspective, I don't foresee EPF aka the Govt would be declaring a lower dividend for the Islamic accounts. KWSP were, are and will continue to be politically motivated or influenced in their management.

I) Maintaining 11% requires more work because effective March, by default employers automatically deduct 8%. To maintain 11%, employees needs to fill up a form and to be forwarded by employer to EPF. That's how Govt automatically wants you to spend more, and at the same time, collect more tax for those who have not exceeded the maximum deductibles for EPF contribution. Thus, your HR have to do more to keep it at 11%.

III) As you said low salary. Having low salary means RM100 more which means a lot for them.

A personal view of mine. Many people KNOWS the theory. It's the practical part of it that is worrisome. Answerable to his/her GOD, doesn't bring back money that is actually due to depositors if no malpractice is carried out. Our tax money (aside from other Govt revenue) are used to bail out GLC's time and time again. So, he is answerable to GOD? AG's report, despite all the wastage, people aren't prosecuted for their "crimes" because it was only due to incompetency or/and "unaware". Yet, we all know they have pocketed in some form or another. So, answerable to GOD as well? Right, you want evidence which the common people can't provide. Then Malaysia must be a very corrupt free nation since many assumed scandals go unpunished because of lack of evidence.

My opinion is, if GOD's leniency is the core value of their practice, we wouldn't have so much malpractice in Malaysia.

So, forgive me when I doubt the principles or values of the people managing our retirement funds, especially now when there are separate funds. They can just switch returns here and there, and none of us would be wiser. Oh wait, except GOD.

They can go to hell for all I care in the afterlife. But while they are still alive and breathing, they are answerable for their actions to the people and to the law.

Forgive my post, it may sound personal, but it isn't, especially not to you. I have merely given up hope that the people in power have GOD on their mind when carrying out their duties.