I recently checked my EPF/KWSP account online after EPF announced its returns for year 2020. In the EPF statement I see these strange transactions called "Pemulihan IPD".
So did some research online and found that Pemulihan IPD transactions are transactions after selling unit trusts that were previously bought using EPF money. IPD is the short form for Institusi Pengurusan Dana and this refers to unit trust/mutual fund/fund management companies like Public Mutual, CIMB Principle, Affin Hwang etc. IPD stands for Institusi Pengurusan Dana which literally means fund management instiutions.
EPF gives depositors option to withdraw funds from EPF Akaun 1 to invest in selected unit trust funds from fund management companies. This scheme is called members investment scheme / Skim Pelaburan Ahli KWSP. When the unit trusts bought under this scheme are sold, all the money will go back into their EPF Akaun 1. Depositors cannot take that money out into their bank account. Money that is withdrawn for this purpose are not entitled for dividend.
Depositors withdraw money from EPF to buy unit trust because they feel some of the unit trusts can generate better return on their EPF money so EPF is giving this flexibility to depositors. Bear in mind also that EPF is generating returns excess of 5% for financial year end 2020, therefore depositors must evaluate wisely if the money withdrawn can be invested and gain a return higher than 5% or not, if not it is better to just leave the money in EPF and let EPF do the investing.
I noticed the time the money is returned to EPF Akaun 1 from selling a particular unit trust from the unit trust company to EPF takes quite some time, sometimes taking almost 1 week to be reflected in the EPF's site dashboard (EPF i-Ivest site).
