SHAH ALAM: The Employees’ Provident Fund (EPF) has reported higher dividend for 2023, declaring 5.5% for Conventional savings and 5.4% for Syariah savings.
Total dividend payout for Conventional savings was RM50.3bil while that for Syariah savings amounted to RM7.5bil.
This came on the back of total investment income increasing by 29% year-on year for the financial year ended Dec 31, 2023, from RM51.91bil in 2022 to RM66.99bil.
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For 2022, EPF had declared a 5.35% dividend rate for Conventional savings with a payout of RM45.44bil, and a 4.75% for Syariah savings, with a payout of RM5.7bil.
EPF chairman Tan Sri Ahmad Badri Mohd Zahir said the overall market volatility in 2023 underscored the importance of its robust investment strategy and prudent risk management.
Of the RM66.99bil in EPF’s total investment income, RM5.72bil was generated from mark-to-market (MTM) gains of securities that have not been realised and will not be part of the dividend distribution.
The retirement fund’s investment assets has continued to record strong growth, with a 13% increase from RM1,002.67bil in 2022 to RM1,135.82bil.
The increase comprised income from the portfolio and a healthy collection of contributions of RM97.56bil in 2023, up 15% from RM84.78bil in 2022.
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About 62% of the investment assets were invested domestically, generating RM31.71bil or 47% of total investment income, while global assets generated RM35.28bil or 53% of the total investment income.
EPF chief executive officer Ahmad Zulqarnain Onn said the mandatory contribution rates would remain unchanged once the flexible account – or Account 3 as announced in the Budget 2024 – is rolled out
Further details about Account 3, which would allow contributors to make withdrawals at any time are expected to be unveiled in April.
“We’re still on track for that timeline,” he said.
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In January, EPF had also separated its Conventional and Syariah savings to allow each portfolio to have an independent Strategic Asset Allocation (SAA) and for each to optimise their returns in the long run.
Ahmad Zulqarnain said separating the two portfolios provided greater flexibility as it was previously a shared portfolio.
“The reason we did that is to give our managers the flexibility in managing the portfolios, such as taking into account the differences potentially in the year in the performance of syariah and non-syariah assets,” he said.
Ahmad Zulqarnain also said that the ringgit was fundamentally undervalued, adding that foreign exchange was just one of the many factors taken into account in managing assets.
The retirement fund, he said, would take a call based on whether an asset was undervalued or overvalued.
“In principle, if the asset is undervalued, we tend to take profit of the assets.
“Foreign exchange rates are not the only factor that we look at in making the decision – whether to buy an asset or sell an asset – but it is one of the factors.”
IN TAPAH, Finance Minister II Datuk Seri Amir Hamzah Azizan said the reduction in the gap between the EPF dividend rates for Conventional and the Syariah savings was a good achievement.
He said the difference in dividend rates between the Conventional and Syariah savings last year was 0.6% but this year, it was only 0.1%.
This reduction was possible due to the improvements, he added.
“If we look in terms of the returns, the 5.5% dividend rate is among the highest declared currently. For the Syariah savings dividend rate, which is 5.4%, the returns are also very good,” he told reporters after witnessing the handing out of the Sumbangan Tunai Rahmah (STR) aid to the Orang Asli community at the Kuala Woh reserve forest eco-park near here yesterday.
