2017 EPF dividend rate could be highest in recent memory

PETALING JAYA: The Employees Provident Fund (EPF) contributors will be in for a pleasant surprise this year as the 2017 dividend rate may be the highest in years.
Many economists have predicted that the dividend rate which will be announced by Prime Minister Datuk Seri Najib Abdul Razak this Sunday will be more than 6%.
Sunway University Business School's Economics Prof Dr Yeah Kim Leng said it is not surprising even if the dividend rate is up to 7.5% as EPF CEO Datuk Shahril Ridza Ridzuan reportedly said the rates may increase to about 6.5%-7.5%.
"Based on EPF's investment and portfolio assets performance, it is not surprising that the dividend rate may be higher than 6%.
"It was reported that the sterling performance for equity and overseas investment has performed extremely well. The CEO has reportedly said the rate can even be up to 7.5%," he told theSun.

Ridzuan had said the dividends are tabulated at least 2% higher than the current inflation rate but pointed out that based on EPF's track record it had always been able to give more than the expected rate.
"So comparing the rates in the last decade, this can be a historical rate as the highest rate since 1996 was 7.7%. But may not be historical high since we have had dividend rates up to 8.5% in the 80s," Yeah said.
The Malaysian Trade Union Congress (MTUC) also expects the announcement to put a big smile on the faces of the 6.5million workers in the country.
Its president Datuk Abdul Halim Mansor said he hopes that the best interest of the private sector workers will be considered when announcing the dividends.
"MTUC respects the PM's prerogative to announce the dividend. We believe that he will give importance to the best interest of the workers as the human capital of the country.
"MTUC believes that the PM will bring big smiles to the 6.5 million workers, who are also EPF contributors. We hope that the 2017 dividend will be better than 2016 dividend," Abdul Halim told theSun.
He said MTUC has given its feedback to the government to consider its request for good returns from the EPF contributions.
Abdul Halim, who also sits on the EPF Board, said every year during EPF's briefing MTUC will urge it to be more proactive in considering the contributor's wellbeing for their retirement.
Noting that 2016 was not a good financial year due to the currency crisis, he said EPF had taken measures to bring positive returns of investment.
Abdul Halim said EPF has changed its approach to be more caring not only in investment strategies but towards the contributors.

In 2016, EPF paid a 5.7% dividend, which was lower than the 6.4% dividend in 2015 and 6.75% in 2014.
EPF had reported a 5.13% increase in investment income to RM12.95 billion in the third quarter ended Sept 30, 2017.
It was also reported that investment income surged 74% to RM11.8 billion in the in the first quarter of last year and increased to RM11.51 billion in the second quarter.