KWSP-i, Yay or Nay?

Recently people around me start asking about the KWSP-i that will be introduced by EPF if the amendments to the Employee Provident Fund (EPF) Act 1991 are passed in the Dewan Rakyat today. 

Here are a few things that you should know about KWSP-i:

What is KWSP-i?

KWSP-i is a Shariah-compliant account that will be an additional option on top of the existing normal account. Which means EPF contributors may choose between the Shariah-compliant account or the normal account. So the "i" would probably stands for Islamic. 

How is KWSP-i account different from KWSP account?

The main difference would be the annual dividend pay out as per below:

Dividend for KWSP normal account = at least 2.5% per annum

Dividend for KWSP-i account = any rate according to the actual investment return

KWSP normal account will still be the same while KWSP-i account will be handled by a new establishment of a Syariah Advisory Committee as well as Investment Panel to ensure Shariah compliance.

Why implement KWSP-i?

With the implementation of KWSP-i, Muslims friends would be able to practice their ethical investing which would be in line with the Shariah principles. Besides, according to CEO Datuk Shahril Ridza Ridzuan, the current EPF portfolio consists of around 40% of Shariah-compliance assets out of the total fund of RM600 billion. So with KWSP-i, it would further strengthen Malaysia's position as the world leading Islamic Financial Hub. 

What do you think?

I have seen mixed response on this issue. Personally I think it is fair to have the added option of KWSP-i for our Muslims friends. But I would think that EPF should be more transparent on their investments and their financial report, afterall we are like the shareholders (contributors) to a huge sum of RM600 billion of fund! 

Yay or Nay?

Which would you choose?