KUALA LUMPUR (Feb 13): The Retirement Fund Inc (KWAP) lodged its highest-ever investment income of RM18 billion for the financial year ended Dec 31, 2024 (FY2024), delivering total returns of 12%.

Domestic investments generated returns of 12.9% while the international portfolio delivered returns of 9%, the public pension fund said in a statement on Thursday.

The bulk of the returns were contributed by the fund's investments in the stock market which generated returns of 21.9%, with domestic equity attaining 23.2% and international equity achieving 16.9%.

“KWAP’s exceptional performance in 2024 reflects our disciplined investment approach, underpinned by the resilience of Malaysia’s economy,” said KWAP chief executive officer Datuk Nik Amlizan Mohamed. “The stable domestic market and supportive policies under the Madani Government were instrumental in strengthening our returns, enabling us to create sustainable long-term value for our stakeholders.”

Meanwhile, the retirement fund’s chairman, Datuk Johan Mahmood Merican said: “Achieving our best results to date highlights our ongoing efforts to support the long-term financial sustainability of the pension ecosystem.

“We are confident that our continued focus on strategic investments and sustainability will further strengthen KWAP’s contributions to Malaysia’s pension ecosystem for generations to come.”
 
As at Dec 31, 2024, public equity made up 51.7% of KWAP's total investment assets, followed by fixed income at 32.4%, private equity at 5.4%, real estate at 5.2% and infrastructure at 2.2%. The balance 3.3% was allocated for cash management for liquidity purposes.

Geographically, 74.6% of KWAP's investment assets were in Malaysia, while international markets accounted for 25.4% of its portfolio.

KWAP’s fund size grew 9.3% to RM185.6 billion in 2024 from RM169.8 billion in 2023, after taking into account withdrawals totalling RM5 billion by the government to partially finance its pension liabilities. Since its establishment in 2007, KWAP’s fund size has quadrupled, with an average growth of 9.1% per annum.

As of Dec 31, 2024, KWAP supported 810,000 pension recipients across Malaysia. This marked a 2.4% increase or 19,000 more recipients from 2023.

Despite the increase of recipients in 2024, service level agreement (SLA) performance score stood at 99.8% in 2024, surpassing the performance threshold of 95% set by the Public Service Department.

Looking ahead, KWAP said it remains focused on navigating an increasingly complex global environment through a data-driven approach, robust risk management and a diversified portfolio.

“This strategy enables the fund to capitalise on opportunities while mitigating risks, ensuring long-term resilience,” it said

KWAP said that under the GEAR-uP programme spearheaded by the Ministry of Finance, the fund remains committed to invest up to RM40 billion over the next five years in the domestic private markets, in collaboration with other GLICs to help catalyse growth in key economic sectors in Malaysia

The fund stressed that it aims to play a key role in shaping a more resilient, inclusive, and adaptable pension system as Malaysia progresses towards pension reform.

KWAP added that it will introduce initiatives that address the evolving needs of Malaysian pensioners beyond financial well-being.

“These efforts include promoting entrepreneurship in the silver economy, improving healthcare access, fostering digital literacy, and supporting overall well-being to help pensioners lead independent and fulfilling lives,” it said.