The Star Online > Nation

Sunday July 3, 2005

EPF studies unit trust proposal

BY M. KRISHNAMOORTHY

KUALA LUMPUR: The Employees Provident Fund (EPF) is studying a proposal to reduce the minimum balance required in Account I to allow for more investments in unit trusts. 

The Federation of Malaysian Unit Trust Managers has proposed that the balance start at RM30,000 instead of the current RM50,000 for members to be eligible to start investing. 

If accepted, the proposal would allow more members to start investing in unit trusts earlier. 

Federation president Tunku Ya'acob Tunku Abdullah said it received positive response at the discussion with the EPF on the proposal. 

“We were informed that they were studying the lowering of the threshold level to RM30,000. 

“I am confident they will make a favourable decision in light of increasing benefits for members,” he said over the telephone from London yesterday. 

The federation also proposed to the EPF a reduction of the three-month waiting period for switching funds between fund managers and concessions for EPF contributors to invest in unit trusts. 

It is understood that the EPF has forwarded the proposals to the Finance Ministry. 

As at the end of last year, the EPF member's Investment Scheme, which was introduced in 1996, saw the withdrawal of RM6.5bil of funds. 

The scheme enables members with savings of at least RM55,000 in Account One to invest a minimum of RM1,000 in unit trusts through government-appointed fund managers. 

In the first quarter of this year, 47,000 contributors withdrew RM482mil for unit trust investments. 

Malaysian Trades Union Congress president Syed Shahir Syed Mohamud advised contributors to be cautious when investing in unit trusts. 

“Get proper advice from reliable financial advisers. 

“As a benefit for members, it will be good for the EPF to disseminate information on how to wisely invest in unit trusts,” he said.