Monday February 18, 2013

Analyst: EPF dividend rate will attract the self-employed to contribute

PETALING JAYA: The 6.15% dividend rate announced by the Employees Provident Fund will encourage more self-employed people to consider participating in the fund, said an analyst.

Alliance Research chief economist Manokaran Mottain said the dividend was one of the highest dividends ever declared in recent years.

“It will encourage more self-employed to participate,” he added.

Manokaran noted that besides the positive impact from more future participation, the dividend also gave an overall “feel-good” sentiment for the economy.

“The market consensus is that gross domestic product growth should be in the range of 5% to 5.5% this year,” he said.

RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said this was “good news” for contributors and it reflected the superior performance of EPF investments last year, particularly equities.

“It is also reflective of the economic performance of the country despite the challenging external environment,” he added

Dr Yeah said given that the dividend was almost double the fixed deposit rates and higher than the average inflation of around 1.7%, this represented “real positive returns”, which would boost contributors' retirement savings.

“It will allow contributors to have a larger pool of savings when they retire,” he said.

Economist Assoc Prof Dr Oh Teik Hai said this was the best dividend rate in recent years and attributed it to EPF's equity and foreign investments.

“The dividend is considered very high since the average fixed deposit and savings rates are only at between 2% and 3%,” he said.

Fund manager and Fortress Capital Asset Management (M) Sdn Bhd CEO Thomas Yong said the dividend was at a “generous level”, especially compared to neighbouring Singapore's Central Provident Fund (a fund similar to EPF).

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EPF declares 6.15% dividend for 2012

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Monday February 18, 2013

Analyst: EPF dividend rate will attract the self-employed to contribute