Weigh risks before shifting EPF funds.
By Hasni Mohd Nasir. The Star.
Employee Provident Fund (EPF) contributors are advised to weigh their risks properly before shifting their retirement savings from the EPF into unit trust funds.
Amanah-SSCM Asset Management Bhd executive director Iskander Ismail said unlike the EPF which provided constant returns on a guaranteed principal sum, unit trust funds had no such guarantee.
“Investing in unit trust funds requires a degree of understanding and investors should be able to catch the wave on time before making their decisions on either to buy or to sell,” he told Starbiz at a function to appoint Bank Islam Malaysia Bhd as the collection agent for Asia Unit Trusts Bhd. (AUTB) in
Iskandar said as the average for EPF contributors to achieve RM100,000 savings in their EPF (the minimum requirement before any withdrawals to invest in unit trusts can be made) was between 43 and 45 years, investors simply did not have any room to make mistakes.
“At that age, it is only appropriate for them to be getting ready to liquidate their position from any investments to prepare for their retirement at the age of 55,” he said.
However, Iskander said the younger generation should be encouraged to invest in these instruments if the EPF could allow the withdrawals to be done earlier.
“If contributors are allowed to withdraw their EPF savings earlier, they should be able to spread their risks comfortably before they reach retirement age,” he said.
He said the EPF should also safeguard the interests of the contributors by capping a limit on the charges imposed by unit trust managers on the units purchased.