Good payout for EPF contributors

by | Mar 6, 2023 | Business, HUMAN RESOURCES, NATIONAL, NEWS | 0 comments

Independent economists agree that given last year’s challenging local and international financial as well as capital market conditions the 5.35 percent dividend by the Employees Provident Fund (EPF) for 2022 is a good payout.

They contend that though the declared dividend is lower than last year’s 6.1 percent, the 5.35 percent is above earlier predictions and forecasts that were close to 5 percent as the fund also had to adjust its portfolio to meet large withdrawals.

The EPF declared a dividend rate of 5.35 percent for conventional savings which is expected to be a RM45.44 billion payout to contributors. For those with syariah savings, the declared dividend is 4.75 percent amounting to a RM5.7 billion payout.

While in total EPF will be paying RM51.14 billion to contributors, the amount would have been much higher if the wages and salaries of the Malaysian workforce were higher to reflect current economic conditions.

However, economists state that it is not surprising that there are contributors who are unhappy with the dividend rates and for them to compare EPF returns with other pension funds as such funds typically earn lower but have more stable returns.

They point out that, in contrast, funds that generate higher returns require taking higher risks and therefore many growth funds are earning much lower returns but EPF’s dividend rate still exceeded their expectations.