Home > News > Regulation > AZ Judge, Politician Pension Could Get Funding via Judicial Fee Bump
Regulation

AZ Judge, Politician Pension Could Get Funding via Judicial Fee Bump

Employer contribution increase, COLA reductions are also being discussed.

By Chris Butera

A House-approved bill could help preserve the Arizona Elected Officials’ Retirement Plan (EORP) by hiking up judicial fees for state residents, AZCentral reports.

Voted in favor by the House Banking and Insurance Committee Monday (a 7-1 landslide), HB 2564 aims to boost 55 Superior Court and 15 justice base court fees while slightly reducing the distribution formulas for domestic-violence, child abuse prevention, and county general services. Should the bill become a law, fees will increase from $2 to $18, subject to which court service is used.

According to Supreme Court Government Affairs Director Jerry Landau, the bill will rake in a maximum $2.5 million for the EORP. As for the reduced formulas, Landau noted that the social services revenue will not be affected due to the raised fees.

The single “no” vote came from Rep. Eddie Farnsworth, R-Gilbert, who, according to AZCentral, felt that all the bill did was try to fix the politician and judge pension’s funding problem with hidden taxes.

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Other ideas being considered by the legislature was raising employer contributions to roughly 61% and reducing cost-of-living benefits from 4% to 2%.

Last year, a percentage of court fees contributed $8.6 million to the EORP, which is managed by the $9 billion Public Safety Personnel Retirement System, which also handles the pensions of corrections officers. However, lavish benefits (which allow some elected officials to collect more money in retirement than they made in office) combined with poor investment decisions, questionable court rulings, and odd legislative decisions (possible solutions being thrown out in court) have caused the EORP to suffer. According to AZCentral, the fund could go bankrupt in under 10 years.

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Home > News > Research > Malaysia’s Largest Pension Returns 14.13% in 2017
Research

Malaysia’s Largest Pension Returns 14.13% in 2017

Employees Provident Fund also declares highest dividend in 20 years.

By Michael Katz

Malaysia’s RM800 billion ($203.33 billion) Employees Provident Fund (EPF) gained RM53.14 billion in gross investment income in 2017, a 14.13% increase  from the RM46.56 billion reported the previous year. It has been growing annually at 11.9% since 2007. 

The EPF also declared a total dividend payout of RM48.13 billion, or $12.24 billion for 2017, a 30% increase from the previous year’s payout. The fund declared a 6.9% dividend for its Simpanan Konvensional account, which is equal to RM44.15 billion, and 6.40% for its Simpanan Shariah account, or RM3.98 billion.

“Simpanan Shariah has shown a strong performance considering that this is its first dividend declaration,” said EPF Chairman Tan Sri Samsudin Osman in a release. “This reaffirms the strength and health of EPF’s shariah asset and should come as good news to our members who have switched to Simpanan Shariah. As for Simpanan Konvensional, the 6.90% was the highest rate ever announced since 1997.”

The fund said the dividends were calculated from total gross realized income for the year, after deducting the net impairment on financial assets, unrealized losses due to foreign exchange rate and derivative prices; investment expenses, operating expenditures, statutory charges, and dividend on withdrawals.

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Gross investment income for 2017 was RM53.14 billion, the highest since the EPF was created in 1951. Simpanan Konvensional accounted for RM48.54 billion of that amount, while Simpanan Shariah was responsible for RM4.60 billion. Simpanan Shariah derived its income exclusively from its portion of Shariah assets, while Simpanan Konvensional generated 62% of its income from non-Shariah assets, and 38% from its Shariah assets.

EPF said the returns for Simpanan Konvensional were enhanced by the income generated from non-Shariah investments following the outperformance of global banking stocks, while Simpanan Shariah does not include conventional banking stocks due to their non-Shariah compliant status.

“There will always be a deviation in Simpanan Shariah returns from Simpanan Konvensional in the short-term,” said Samsudin. “However, the returns are expected to be similar over the long term as both share the same investment objectives and strategies.”

The dividend rates for Simpanan Konvensional and Simpanan Shariah were 2.61% and 3.11%, respectively, for 2017, over an inflation rate of 3.79%. For the past three years, the EPF has declared a rolling three-year real dividend of 3.51% and 3.67%, which the fund said exceeded its strategic target of 2% real dividend.

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