Finance Ministry says National Trust Fund Bill safeguards RM22.43b reserves, ensures growth
PUTRAJAYA, July 17 — The National Trust Fund Bill 2026, which was passed by the Dewan Rakyat yesterday, will strengthen the National Trust Fund (KWAN) as the country’s intergenerational savings fund to ensure sustainable financial reserves for both present and future generations.
The bill also marks the first comprehensive reform of KWAN since its establishment in 1988.
In a statement today, the Finance Ministry (MOF) said the reforms introduced under the bill reflect the Madani government’s commitment to strengthening public financial management, safeguarding the nation’s wealth sustainably, and ensuring that today’s national revenues continue to benefit future generations.
“In line with the government’s economic reformation agenda, the Bill outlines important reforms to strengthen governance, fiscal discipline and the country’s financial resilience for the benefit of the people and future generations,” the ministry said.
Under the Bill, a National Trust Fund (Incorporated) will be established as a statutory body to replace the existing panel structure, with a board responsible for administering, managing and investing the fund.
During the transition period, the fund will continue to be administered and managed by Bank Negara Malaysia (BNM), which has performed this role since KWAN’s establishment, to ensure continuity.
Under BNM, the fund has grown to RM22.43 billion (as of end-2024), and during the transition, there will be no disruption to the fund’s investments, contracts or operations, with all assets to be transferred to the new statutory body by operation of law.
The ministry said that, for the first time, the Bill introduces legally-binding provisions governing contributions, withdrawals and investments.
These include mandatory statutory contributions requiring the Federal Government to contribute at least 0.1 per cent of its projected annual revenue, in addition to 2.0 per cent of Petronas dividends received by the Federal Government and 2.0 per cent of depletable resource export duties received by the Federal Government, after deducting allocations to state governments.
The prescribed rates are the minimum contribution levels, and the Federal Government may make additional contributions at any time, it said.
The Bill also introduces stricter withdrawal discipline, limiting the use of the fund to education, healthcare, and climate change mitigation and adaptation.
Annual withdrawals are capped at no more than 50 per cent of the expected long-term real rate of return to preserve and grow the fund’s principal.
“Any withdrawal exceeding the limit will require the approval of the Dewan Rakyat. Additionally, the fund will be prudently invested across approved asset classes, guided by a Strategic Asset Allocation approved by the minister,” MOF said.
Meanwhile, Finance Minister II Datuk Seri Amir Hamzah Azizan said that the resources enjoyed today do not belong solely to the present generation, but are held in trust for future generations.
“Through this Bill, the government is strengthening KWAN as an intergenerational savings fund by ensuring more consistent sources of contributions, more disciplined withdrawals and better governance.
“This will enable more of the nation’s wealth to be preserved and passed on to future generations of Malaysians,” he said.
The Bill, which is aimed at establishing a long-term financial reserve, was tabled by Deputy Finance Minister Liew Chin Tong and was passed with a majority of votes in favour after being debated by 14 Members of Parliament in the Dewan Rakyat. It will next be tabled in the Dewan Negara.
