2017 EPF DIVIDENDS
Total payout an increase of 29.8pc from 2016
DIVIDEND PAYOUT FOR CONVENTIONAL SAVINGS HIGHEST SINCE 1997
GROSS INVESTMENT INCOME OF RM53.14 BILLION HIGHEST SINCE FUND’S ESTABLISHMENT IN 1951
DIVIDENT PAYOUTS BENEFIT 14 MILLION CONTRIBUTORS
THE Employees Provident Fund (EPF) has declared a dividend of 6.90 per cent for Simpanan Konvensional (conventional savings) for last year, with a payout amounting to RM44.15 billion.
The payout for conventional savings is the highest since 1997.
The fund also declared a 6.40 per cent dividend for the fledgling Simpanan Shariah (syariah savings), with payout amounting to RM3.98 billion. Simpanan Shariah was intro- duced on Aug 8, 2016.
In total, the payout for last year amounts to RM48.13 billion, an increase of 29.8 per cent from 2016, benefiting more than 14 million contributors.
The dividends will be credited into its contributors’ accounts today.
EPF chairman Tan Sri Samsudin Osman said he was pleased with the overall 2017 performance, which was a landmark year for EPF as it was now managing two savings schemes and declaring two dividend rates.
“Simpanan Shariah has shown a strong performance considering that this is its first dividend declaration.
“This reaffirms the strength and health of EPF’s syariah asset, and should come as good news to members who have switched to Simpanan Shariah.
“As for Simpanan Konvensional, the 6.90 per cent is the highest rate ever announced since 1997,” he said.
The dividends for each account were derived from the total gross realised income for the year after deducting the net impairment on financial assets, unrealised losses due to foreign exchange rate and derivative prices, investment expenses, operating expenditures, statutory charges, as well as dividend on withdrawals.
Simpanan Shariah derived its income solely from its portion of syariah assets, while for Simpanan Konvensional, 38 per cent of the income was generated by its share of syariah assets and 62 per cent from non-syariah assets.
Gross investment income for last year was RM53.14 billion, the highest since EPF’s establishment in 1951.
Of the amount, RM4.60 billion was attributed to Simpanan Shariah, proportionate to its share of total syariah assets, while RM48.54 billion was attributed to Simpanan Konvensional.
The returns for Simpanan Konvensional were enhanced by the income generated from nonsyariah investments following the outperformance of global banking stocks, while Simpanan Shariah does not include conventional banking stocks due to their nonsyariah compliant status.
In addition, equity impairments from syariah-compliant stocks, particularly oil and gas, and telecommunication counters, lowered the income of EPF’s syariah portfolio.
Samsudin said there would always be a deviation in syariah returns from conventional ones in the short term.
However, he said the returns were expected to be similar over the long term as both shared the same investment goals and strategies.
“As a retirement fund, our objective is to preserve and enhance the value of our members’ retirement savings, and this can be measured by looking at our declared dividends against Malaysia’s inflation rate.
“For last year, the dividend declared for Simpanan Shariah and Simpanan Konvensional were 2.61 per cent and 3.11 per cent respectively over an inflation rate of 3.79 per cent.
“For the past three years, EPF has declared a rolling three-year real dividend of 3.51 per cent and 3.67 per cent respectively, which exceeded our strategic target of two per cent real dividend,” he said.
On the RM48.13 billion dividend
2017 payout, Samsudin said the amount needed to pay one per cent dividend was RM7.02 billion, in tandem with the annualised growth of members’ savings of 10.98 per cent since 1990.
As at Dec 31 last year, total members savings amounted to RM768.51 billion, of which RM67.76 billion was under Simpanan Shariah and RM700.75 billion under Simpanan Konvensional.
He said this was a challenge that had gone into managing a large fund like EPF as it needed to generate consistent and sustainable returns for the long run.
“This is partly the reason why we need to diversify into overseas markets as the increase in global asset value helps us realise sizeable gains from different markets and asset classes, which contributed to the overall performance,” said Samsudin.
Last year’s RM53.14 billion gross investment income increased 14.13 per cent from RM46.56 billion in 2016. The amount has been growing annually at 11.90 per cent since 2007, and is equivalent to a gross return on investment (ROI) of 7.30 per cent.
Samsudin said EPF’s investments had been delivering a three-year annualised ROI rate of 7.30 per cent, which was commendable given its nature as a balanced fund with exposure in fixed income instruments of about 50 per cent.
“On that note, I congratulate the EPF team for this outstanding performance in ensuring that our assets (continue to) grow at healthy levels in line with EPF’s vision to help its members achieve a better future and their savings and interest are continuously safeguarded.”
Members can check via www.kwsp.gov.my or through the i-Akaun mobile application.
The application is available for download via Google Play Store or Apple App Store.
Members who wish to switch to Simpanan Shariah 2019 may do so by registering before Dec 25 this year.