PETALING JAYA: The Armed Forces Fund Board (LTAT) has responded to the negative reserve highlighted in the Auditor-General’s Report for 2022, stating that it is just one aspect of their overall financial situation.
LTAT explained that their combined reserves consist of three components – retained earnings, reserve fund, and the OCI reserve, which together demonstrate the board’s stability. The reserve fund is set at 2% of contributors’ account balances, providing a solid foundation for financial security.
The OCI reserve represents unrealized gains/losses of assets categorized as fair value through other comprehensive income, reflecting market fluctuations and asset performance. Despite the OCI reserve showing a deficit, the end of Financial Year 2022 saw a net positive balance of RM160 million, an improvement from the previous year.
LTAT further stated that the unaudited post-dividend combined reserve for Financial Year 2023 is expected to show additional improvement, showcasing the board’s dedication to strengthening its financial position through transformation.
Regarding the issue of non-cash profit contributing to income for FY22, LTAT clarified that even without it, their solvency position remains above the required threshold outlined in their dividend policy. Dividends declared by the retirement fund are non-cash and credited to members’ accounts, ensuring stable liquidity to meet all commitments.
LTAT emphasized its commitment to transparency, accountability, and the welfare of contributors and beneficiaries, vowing to uphold high standards of governance and financial management to protect the interests of all stakeholders.
The Public Accounts Committee (PAC) announced its intention to summon LTAT’s former chairman, former CEO, and former senior strategic officer to elucidate the losses. The AG’s report noted negative reserves of RM376 million in 2020, RM258 million in 2021, and RM338 million in 2022.
