KUALA LUMPUR – The Employees Provident Fund (EPF) has declared a dividend rate of 5.50% for conventional savings for 2023, with a total payout of RM50.3 billion.
Its chief executive officer Ahmad Zulqarnain Onn also announced a 5.40% dividend for shariah savings with a total payout of RM7.48 billion.
This brings the total payout for 2023 to RM57.81 billion – a 13% rise from RM51.14 billion in 2022, in which EPF announced a dividend of 5.35% for conventional savings and 4.75% for shariah savings.
EPF paid its highest dividend of 8.5% in 1986, while its lowest dividend of 5.2% was paid in 2020.
Zulqarnain, who assumed office last month following the appointment of his predecessor Datuk Seri Amir Hamzah Azizan as the second finance minister, announced that for the financial year ending on December 31, 2023 (FY2023), the retirement savings fund achieved a notable milestone.
It recorded a total investment income of RM66.99 billion, marking a significant 29% increase from the RM51.91 billion reported in 2022, he said.
“Out of the RM66.99 billion in total investment income, RM5.72 billion were generated from mark-to-market gains of securities that have not been realised and will not be part of the dividend distribution.
“It has been the EPF’s prudent practice to pay dividends only out of realised income,” he said at the press briefing on the retirement fund’s 2023 performance.
The higher rates were possible because of the good performance of its foreign investments, which account for 38% of its total assets, he added.
In 2023, Zulqarnain said RM31.71 billion or 47% of the total investment income originated from domestic investments, while global assets contributed RM35.28 billion, representing 53% of the overall investment income.
He also said public equity contributed RM34.31 billion in investment income, while private equity was at RM5.14 billion. Meanwhile, EPF’s investment assets continued to record strong growth at RM1.135 trillion in 2023, an increase of 13% from RM1.0 trillion in FY2022.
“The increase comprised income from the portfolio and a healthy collection of contributions of RM97.56 billion in 2023, an increase of 15% from RM84.78 billion in FY2022,” he added.
In a statement, EPF chairman Tan Sri Ahmad Badri Mohd Zahir said after netting off the inflation rate, the real dividend for conventional savings was 2.89% and 2.51% for shariah savings on a rolling three-year basis (2021 to 2023), exceeding its strategic target of at least 2.0% real dividend over the same period.
He said that despite the intensifying geopolitical tensions, elevated interest rates, inflation, regional conflicts, and China’s property sector woes, the global economy showed resilience and fared better than expected.
“Alhamdulillah, EPF is able to deliver improved dividends following a resilient performance in 2023, with equities playing a significant role in driving overall performance,” he said.
The global equities market experienced a varied performance last year, particularly between Asean and developed markets.
Developed markets’ equity benchmark indices exhibited positive growth while both Bursa Malaysia benchmark index (FBM KLCI) and Asean indices recorded negative growth, with the FBM KLCI declining by 2.7%.
Nonetheless, Badri said EPF’s strategic asset allocation, coupled with active portfolio management, enabled it to achieve positive results in 2023.
Moving forward, he said EPF’s resilient investment approach and unwavering focus on long-term value creation should set the path for it to continue to deliver strong performance and uphold its commitment to its members. – March 3, 2024
