THE discussion on the future of Malaysians, as we move towards an ageing nation, has been a compelling subject these past few years.
Most pension funds have vigilantly monitored whether they can sustainably uphold this responsibility.
To excel in our endeavours, a medley of initiatives has been orchestrated, fortifying the Retirement Fund Inc (KWAP) resilience in the face of the prevailing challenges of an ageing nation.
To ensure a bright future for our beneficiaries in the decades to come, KWAP has implemented Teras 5 — a strategic pursuit aimed at attaining better returns through diversification across an array of distinctive asset categories.
This initiative, spanning from 2022 to 2025, revolves around the elevation of five pivotal enablers — structural refinement, judicious governance, empowered personnel, streamlined processes, and digital innovation.
Within the ambit of these foundational pillars, our bedrock has grown robust enough to secure a commendable 6.04 per cent Time Weighted Rate of Return (TWRR) in 2020, where the gross investment income was recorded at RM6.81 billion, higher than the RM6.07 billion recorded in 2019.
With the target to achieve a sustainable seven per cent long-term TWRR under Teras 5, KWAP has revised and strengthened its Strategic Asset Allocation (SAA) to increase our investment in private markets, namely private equity, private credit, infrastructure and real estate.
Going forward, Teras 5 will be crucial in realising our targets that necessitate enhanced efficiency as we meticulously evaluate investment opportunities across all asset classes.
KWAP's vision encompasses the attainment of a substantial gross fund size, totalling RM200 billion by 2025. We also aspire to expand the number of our properties, from the current 18 to 30, with over 35 subsidiaries.
Since KWAP was established in 2007, the pension fund has more than quadrupled its portfolio size from RM41.9 billion back then to about RM184.5 billion currently (unaudited as of July 2023).
Under Teras 5, digitalisation is one of the pillars that shall prepare KWAP to become future-proof, agile and assist us in achieving our RM200 billion target.
In the past five years, we have built our capabilities in systems, processes, people, and structure. We are also enhancing our IT system with new user requirements and technology, that could benefit KWAP and our contributing agencies.
With the ambition towards achieving digital excellence, the transformation is built upon the strategic pillars of digital governance and service, cyber resilience, technology, data management as well as digital business systems.
All this will enable the objective to support investment growth through digital systems, enhance customer digital experience, improve customer trust through cyber resilience, deliver improved investment and retirement service data, improve employee productivity as well as support our environmental, social and governance (ESG) initiatives through the reduction of carbon footprint and good digital governance.
Through the digitalisation roadmap, 79 initiatives have been identified to achieve the transformation objectives and target outcomes.
While we continue to provide the best platform for our contributors to build and preserve their financial future, it is also important for us to proactively involve our stakeholders to better understand their position, gain insights into their viewpoints, tackle their concerns, and realign the mutual requirements and expectations of both parties.
In this regard, KWAP held its inaugural Contributors Forum attended by more than 400 of its contributors nationwide on Sept 5.
The forum, aimed at nurturing dialogue and collaboration between KWAP and our stakeholders, served as a valuable platform for stakeholders to express concerns, expectations, and ideas.
We hope the collaboration from this forum will be continuous and could enhance KWAP's digital productivity and agility, ultimately paving the way for an effective and sustainable public pension system.
* The writer is Chief Executive Officer of Retirement Fund Inc (KWAP)