KUALA LUMPUR (July 16): After nearly four decades since the National Trust Fund’s (KWAN) establishment, its current sole contributor, Petroliam Nasional Bhd (PETRONAS), has contributed a total of RM13.5 billion since the fund’s inception, according to the Ministry of Finance.
Meanwhile, funds from KWAN have only been utilised twice — RM5 billion to finance the purchase of Covid-19 vaccines between 2021 and 2023, and RM42 million for the Malaysia Wetland Sanctuary project in 1998 — said Deputy Finance Minister Liew Chin Tong.
As at end-2024, net assets of KWAN, established in 1988 as the country’s long-term savings and reserve from revenue generated from depleting resources, have grown to RM22.43 billion.
“This record reflects the original intention behind the establishment of KWAN as a long-term national savings fund that would only be used when truly necessary,” Liew told the Dewan Rakyat when tabling the National Trust Fund Bill 2026 for second reading on Thursday.
“Nevertheless, experience in administering KWAN has shown that although the existing Act has enabled the fund to function well, that original intention should be strengthened through a more robust legislative framework to ensure that this intergenerational savings fund remains sustainable,” he said.
The National Trust Fund Bill 2026 proposes a significant overhaul of KWAN, including mandatory annual contributions from the federal government, restrictions on the sum and purpose of withdrawals, and the establishment of a body responsible for its administration.
The proposed law, which will repeal the existing National Trust Fund Act 1988, proposes annual contributions to comprise at least 0.1% of the federal government’s projected annual revenue, at least 2% of the dividend it receives from PETRONAS, and at least 2% of export duties collected on depleting natural resources, including crude oil, mineral ores and iron ore.
The export duty contribution applies only to the federal government's share of revenue and will not affect portions legally assigned to state governments. Contributions from state governments will remain voluntary, coming through resource royalties or investment fund income.
The bill specifies that future withdrawals can only be used for education, healthcare and climate change mitigation and adaptation purposes.
Withdrawals from the fund will also be capped at 50% of its estimated real rate of return for that financial year. Any withdrawals exceeding that threshold will require prior approval from the Dewan Rakyat.
The National Trust Fund (Incorporated) will be established as the body responsible for administering the fund.
“The governance structure has been developed by taking into account the best governance practices of public investment institutions, including the Employees Provident Fund (EPF) and Retirement Fund Inc (KWAP),” Liew noted.
For more Parliament stories, click here.