EPF likely to declare dividends of up to 5.6% for 2023

The EPF is likely to give a bigger payout this year, thanks to the good performance of its overseas investments.

PETALING JAYA: The 16 million contributors to the Employees Provident Fund (EPF) may well have cause to celebrate this year.

A source told FMT Business today that higher dividends of up to 5.6% are on the cards, largely attributable to the good performance of the fund’s overseas investments.

EPF is due to make an announcement before the end of the week, and the source said contributors can expect to see a dividend of 5.4% to 5.6% for conventional savings, up from the 5.35% declared for 2022.

Those with shariah accounts are likely to see dividends of 4.9% to 5.1%, compared with 4.75% the previous year.

Another source said that while there was a dip in earnings in the last quarter and its domestic equities have been performing poorly, the better performance of its offshore investments has picked up the slack.

He said the dividends would have been higher had they not been offset by the poor performance of the local equity market.

The source said EPF’s investments in global equities had performed well. EPF’s offshore investments account for 38% of its total assets.

The source added that the expected dividends are much higher than the interest rates for fixed deposits (FD) offered by local banks.

“It will be especially beneficial for members who have topped up their savings under EPF’s new facility by moving their FD savings into EPF,” the source told FMT Business.

EPF chalked up an investment income of RM47.86 billion in the first nine months of 2023, a 33% increase over the same period the year before.

In 2022, EPF paid out a total of RM51.14 billion in dividends, of which RM45.44 billion was for conventional savings while the remaining RM5.7 billion was for those with shariah savings.

Despite the global impact of Covid-19 that began in 2020, EPF has managed to give out fairly high dividends.

In 2020, the conventional dividend amounted to 5.2% while that of shariah accounts was 4.9%.

In 2021, the dividends for conventional and shariah accounts were 6.1% and 5.65% respectively while in 2022 they were 5.35% and 4.75% respectively.

The highest dividends ever declared were 8.5% from 1983 to 1987 and 8% from 1988 to 1994.