I refer to the Malaysiakini report EPF declares 4.5% dividend for 2008 .

The Employees Provident Fund claims that their dividend rate of 4.5% compares favourably with the current fixed deposit rates offered by Malaysian banks at 2.5%.

I find this comparison flawed.

The EPF dividend rate of 4.5% relates to the year 2008 when the fixed deposit rate offered by Malaysian banks in 2008 was 3.7%.

This means that the EPF has done better by a mere 0.8% as compared to conventional fixed deposits.

It is also incorrect to make comparisons with Calpers, Khazanah and Temasek (which have lost by a bigger margin in 2008) as these funds have a higher equity mandate and different risk profiles.

I find it ironic that nothing is mentioned that these funds outperformed EPF in the prior years apart from 2008.

It is worth noting that conservative bond funds, structured fixed income and capital guaranteed products produced much better results last year.

For a fund managing more than RM330 billion, EPF’s performance is somehow lacklustre.

EPF should be more transparent in publishing a detailed list of its investment holdings complete with its purchase cost and current market prices so as to clear any doubt that EPF funds have been used to bailout politically-connected companies and individuals.

The conventional investment would be to buy low and sell high. It seems that EPF certainly have erred in investing in such a big way before the financial crisis leading to substantial provisioning for diminution in listed investments.

As it stands now, EPF is 23% invested in equities. On hindsight, EPF should have reduced substantially its investments in equities during the boom market in order to have a ‘war chest’ when prices came falling down.

The conventional wisdom of buying low and selling high is a time-tested philosophy. Instead, it is obvious that EPF invested high in the hope of selling higher.

On another matter, as an accountant myself, I find the policy of providing investment provisioning somehow not so prudent as compared to applying the mark to market rule in which the market prices should be reflected on the balance sheet.

In this case, I dread to know the revised investment provision if applied the mark to market rule.

I pray for a better future EPF investments returns and more transparent disclosures.