KUALA LUMPUR: The Employees Provident Fund (EPF) Board yesterday announced a dividend rate of 5.50 per cent for Simpanan Konvensional and 5.40 per cent for Simpanan Shariah.
This brings a total payout of RM50.33 billion for Simpanan Konvensional and RM7.48 billion for Simpanan Shariah, bringing the total payout amount for 2023 to RM57.81 billion.
For the year ended December 31, 2023, the EPF recorded a total investment income of RM66.99 billion, a 29 per cent increase from RM51.91 billion in 2022.
EPF in a statement said the amount is net of listed equity write downs recorded for the year.
Out of the RM66.99 billion in total investment income, RM5.72 billion 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 EPF’s prudent practice has been paying dividends only out of realised income.
EPF chairman Tan Sri Ahmad Badri Mohd Zahir said the EPF delivered improved dividends following a resilient performance in 2023, with equities playing a significant role in driving overall performance.
“Despite the intensifying geopolitical tensions, elevated interest rates, inflation, regional conflicts, and China’s property sector woes, the global economy showcased resilience and fared better than expected.
“This allowed the EPF to actively manage its diversified portfolio and capture opportunities to enhance returns.
“After netting off the inflation rate, the real dividend for Simpanan Konvensional was 2.89 per cent and 2.51 per cent for Simpanan Shariah on a rolling three-year basis (2021-2023), exceeding the EPF’s strategic target of at least 2 per cent real dividend over the same period.
“As a retirement fund, it is important for the EPF to consistently deliver long-term above-inflation returns to preserve and enhance the value of its members’ savings,” he said in a statement.
EPF’s investment assets continued to record a strong growth to RM1.13 billion, an increase of 13 per cent compared to RM1.00 billion in 2022.
The increase comprised of income from the portfolio and healthy collection of contributions of RM97.56 billion in 2023, an increase of 15 per cent from RM84.78 billion in 2022.
The EPF’s portfolio diversification and active fund management allowed it to deliver improved dividends for 2023.
The RM57.81 billion dividend distribution will benefit more than 16 million EPF members, encompassing individuals from both formal and informal sectors.
EPF said 2023 saw a mixed performance in the global equities market, particularly between the ASEAN and the developed markets.
Ahmad Badri said the overall market volatility in 2023 underscored the importance of the EPF’s robust investment strategy and prudent risk management.
RM58.97 billion out of the RM66.99 billion total investment income was generated for Simpanan Konvensional and RM8.02 billion for Simpanan Shariah.
Simpanan Shariah derives its income solely from its portion of the Shariah portfolio, while income from Simpanan Konvensional is generated by both the Shariah and Conventional portfolios.
The EPF remains the largest investor in the domestic market with an asset under management (AUM) of RM702.48 billion as of December 2023, compared to RM643.38 billion in 2022.
Deployment into the domestic market accounted for more than 80 per cent of the 2023 investment allocation, providing capital to Malaysian companies and the economy as a whole.
As of December 2023, the EPF holds about 28 per cent of the outstanding MalaysianGovernment Securities (MGS) and Government Investment Issues (GII) issuances and about 12 per cent of the FTSE Bursa Malaysia Top 100 Index market capitalisation.
“The EPF’s active participation in the domestic equity market is integral to our mission of creating long-term value for our members.
“The EPF continues to increase allocation to external managers, further diversifying its investments while supporting the growth of the domestic fund managers,” Ahmad Badri said.
He said views on the global growth outlook are still mixed.
“Since the pandemic, the world has had several years of uncertainty, and countries have demonstrated a real sense of resilience and agility.
“While the global markets presented formidable challenges, the 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,” Ahmad Badri said.
Starting January this year, the EPF has separated its Simpanan Konvensional and Simpanan Shariah portfolios into their Shariah-compliant investment to allow each portfolio’s returns to be optimised in the long run, with each portfolio having an independent
SAA.
The separation also ensures that assets under both Simpanan Shariah and Simpanan Konvensional is diversified across asset classes, geographies, markets and industries to ensure sustainable returns.
EPF said 2024 is an eventful year for the EPF as it embarks on several initiatives to meet the evolving needs of EPF members, ensuring financial resilience and well-being during their retirement years.
The ongoing trend toward a higher prevalence of informal employment over formal employment will drive the continued implementation of EPF’s strategic initiatives.
To help members build future income security, the EPF’s range of products and services have been enhanced to tailor to different life stages and financial goals.
