Deputy director of BNSC slams Rafizi Ramli over his ignorance about the normal practice of investment re-allocation by fund mangers including the EPF.
PETALING JAYA: The deputy director of the Barisan Nasional Strategic Communications (BNSC) unit has refuted a claim by Rafizi Ramli that the Employees Provident Fund (EPF) would breach finance ministry rules by making additional investments in the US as announced by Prime Minister Najib Razak on his recent visit to the White House.
Eric See-To said the investments would not violate the 30% foreign assets limit on EPF as alleged by the PKR vice-president, as the fund’s total assets were expanding.
“For him to attack the prime minister over a non-existing breach shows that Rafizi has a shallow understanding that EPF can re-allocate assets or that its asset base continues to grow strongly,” he said
“Clearly, the public can see who is the real person displaying ‘maximum stupidity’ here,” he said, referring to Rafizi’s reported jibe yesterday that Najib had shown “maximum stupidity” as finance minister when highlighting the plan during his meeting with US president Donald Trump on Sept 12.
See-To said EPF could always re-allocate its existing foreign investments by, for example, shifting assets from the UK or Singapore to the US which would keep the 30% limit intact.
“Investment re-allocation is a normal practice of any fund manager but it appears YB Rafizi is ignorant of this fact,” he said in statement today.
He also said EPF”s assets were not static. “In fact, the opposite is true as the value of EPF’s investment assets had experienced strong growth in recent years – growing from RM636 billion at the end of 2014 and which is now at RM760 billion as at end June 2017,” he said.
“This is a solid growth of RM124 billion in just 2.5 years. When EPF’s total investment assets grow, so too does the value of the funds within the 30% limit,” he added
Najib had told Trump that the EPF wanted to spend US$3-4 billion on US infrastructure development.
Yesterday, Rafizi reportedly said Najib did not realise that his assertion went against the ministry’s rules which limit EPF’s foreign investment to only 30% of its total investments.
He said EPF CEO Shahril Ridza Ridzuan had said in February that the fund has nearly reached this maximum limit, and the foreign assets had already touched the 29% level by the end of June.
See-To said Rafizi’s attacks on the EPF while it was working to deliver best returns to its investors suggested that the Pandan MP did not care about the dividends EPF members received.
“There is nothing wrong for the EPF to invest in US equities,” he said.
“Other funds in the world such as the Japan pension funds, the Norway sovereign fund and Singapore’s Temasek and GIC funds have invested heavily there,” he added.
He also said the EPF had announced several times that its overseas investments had outperformed domestic investments, resulting in higher dividends for its contributors.
In a statement on Sept 14, EPF had said all investment proposals are assessed and go through a robust due diligence process to protect the interests of its 14 million members.
“EPF scrutinises foreign investment opportunities that fit its risk and return profile as a retirement savings fund, in line with our long term overseas diversification programme.
“The US is one of the key markets within the EPF’s investment universe given its size and depth,” it said.
EPF also noted that as of the first quarter of 2017, EPF’s overseas investment accounted for 29% of its total investment asset and contributed 37% to the total investment income.
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