KUALA LUMPUR (March 7): The Retirement Fund Inc's (KWAP) total gross fund size has reached RM190.3 billion as at Dec 31, 2023, following adjustment for a cumulative withdrawal of RM20.5 billion for the partial funding of the government's annual pension duties since 2018.
The Ministry of Finance (MOF) said KWAP's unaudited consolidated fund as at Dec 31, 2023, amounted to RM169.8 billion, a growth of 305% for a compound annual growth rate of 9% since its inception on March 1, 2007.
The ministry said that as a long-term institutional investor, KWAP's investment objective is to seek maximum returns on investment on a sustainable basis through dynamic investment strategies in line with the fund’s risk appetite.
“With regard to this, KWAP has not been given the mandate directly to reduce the fiscal implication towards the civil servant pension allowance.
“Nevertheless, KWAP's consolidated fund can be applied towards meeting the government's liability on the cost of annual civil servant pension remuneration through the fund withdrawal mechanism as provided in Act 662’s subsection 13(5),” the MOF said in a post on the Parliament's website on Wednesday.
The ministry was responding to a question from Datuk Mohd Shahar Abdullah (BN-Paya Besar) on whether KWAP's performance could reduce the fiscal impact on civil servant pension allowance.
“The growth of KWAP's consolidated fund, basically, can be linked with consistent investment returns where funds had generated average annual returns of 6.3% since its inception.
“This achievement is based on dynamic investment strategies spearheaded by the Strategic Asset Allocation,” it said.
Mohd Shahar also asked if the government had plans for the Employees Provident Fund (EPF) to alter its focus from retirement-based benefits to a comprehensive social security scheme.
The MOF said that currently, the EPF will continue to give priority to implementing its mandate to ensure the well-being of Malaysians in their old age to ensure a more effective implementation of the country's social security framework.