In a briefing at the EPF headquarters here today, EPF Chief Executive Officer Shahril Ridza Ridzuan explained that the Simpanan Shariah is a new savings option for members who wish to convert their current conventional EPF savings to one managed and invested in accordance with shariah principles.

“Based on the Members’ Consultation exercise that the EPF carried out last year, more than 70% of the survey respondents agreed that there should be an option to have their retirement savings managed according to shariah principles,” he said.

Simpanan Shariah, which will be launched in 2017, is open to all members regardless of race, religion and nationality.

Shahril revealed that EPF has allocated an initial fund of RM100 billion, which is equivalent to about 15% of the EPF’s total investment assets of RM681.71 billion as at end March 2016.

He pointed out that Simpanan Shariah was not the EPF’s first venture into Islamic investments as more than RM295 billion of EPF’s total investment assets were already shairah-compliant.

He added that EPF planned to invest even more in the near future.

“Moving forward, we expect to grow our investments in shariah assets by at least RM25 billion a year on average, or in tendem with the total asset growth in order to maintain a minimum of 45% shariah assets.”

Shahril said that members who choose to convert their current conventional EPF accounts to shariah-compliant ones will need to personally go to an EPF branch with their identification cards in order to verify their thumbprint.

The current contribution process and enforcement process will remain the same but in compliance with shariah principles, the dividend rate for Simpanan Shariah will be based on portfolio performance of the shariah-compliant investments and will not have any guaranteed minimum dividend.

“A Shariah Advisory Committee (SAC) has been formed to oversee the operational, investment and governance aspects of Simpanan Shariah.

“The SAC will also recognise shariah investment products as regulated or approved by Bank Negara Malaysia and the Securities Commission Malaysia.”

Applications for the Simpanan Shariah will be on a first-come, first-served basis. To be eligible for the shariah-compliant savings option, members must submit their applications by Dec 23, subject to availability under the RM100 billion fund.