THE Employees Provident Fund (EPF) has declared a dividend payout rate of 6.9% for conventional savings and 6.4% for shariah savings for last year.

EPF chairman Samsudin Osman said the conventional savings payout was the highest since 1997.

“For conventional savings, the 6.9% is the highest rate ever announced since 1997,” he said in a statement today.

The rate for conventional savings in 1997 was 6.7%.

The payout for conventional savings amounted to RM44.15 billion, and for shariah savings, RM3.98 billion.

The total payout for last year is RM48.13 billion, which EPF said was an increase of 29% from 2016.

EPF said its gross investment income for last year – RM53.14 billion – was the highest since it was formed in 1951.

Samsudin said this was why the fund had to diversify its investments, including in overseas markets, to sustain profit in the long term.

“This is the challenge in managing a large fund like EPF, as we need to generate consistent and sustainable returns in 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 contribute to the overall performance.”

EPF’s announcement of the highest dividend in 20 years comes as the country waits for Prime Minister Najib Razak to call the 14th general election, which he is expected to do soon.

The announcement also comes on the back of higher payouts from national equity fund Permodalan Nasional Bhd (PNB) and haj fund Tabung Haji.

The last time EPF paid more than 7% was in 1996, during the Dr Mahathir Mohamad era, which many see as a time of economic prosperity for Malaysia.

Since Dr Mahathir took office in 1981, until the 1997 economic recession, EPF’s annual payout averaged nearly 8%.

The fund’s highest dividend since was 6.84%, in 1999.

PNB, in December last year, had announced a 7% dividend, plus a 1% bonus for the first 10,000 units held in more than nine million Amanah Saham Bumiputera accounts, as the fund marked its 40th anniversary.

It also declared a 5% dividend for Amanah Saham Nasional, resulting in a year-to-date return of 15% for 1.2 million subscribers. – February 10, 2018.