Kuala Lumpur: The Employees Provident Fund’s (EPF) decision to pay a 6.30 percent dividend for 2024 is anticipated to invigorate economic activities and bolster national growth, according to economists.
According to BERNAMA News Agency, Malaysian Economic Association president Dr Yeah Kim Leng noted that the dividend, which is the highest in seven years, will enhance the savings of over 16 million EPF members, improving their future financial well-being. This increase is expected to result in higher withdrawals for eligible members, thereby accelerating the velocity of money through spending or investment and, subsequently, stimulating economic activities.
Earlier today, the EPF announced an increased dividend rate of 6.30 percent for both conventional savings and shariah accounts for 2024, resulting in a total payout of RM73.24 billion. The improved dividend performance was attributed to recovering global and domestic markets, resilient economic growth, and effective portfolio management. For the year ending December 31, 2024, the fund reported a total investment income of RM74.46 billion, marking an 11 percent rise from RM66.99 billion in 2023.
Economist Prof Geoffrey Williams commented that the higher dividend will augment the balances of active EPF members’ accounts. This could potentially lead to increased transfers into Akaun Fleksibel, fostering higher consumption throughout the year and supporting economic growth.
Yeah highlighted that the EPF’s performance, with a dividend rate for 2024 nearly double the average fixed deposit rate, is commendable not only for generating superior returns but also for maintaining consistency in delivering high returns annually. The fund’s strong and stable performance is envied by many pension and investment funds globally, especially amid rising global uncertainties and financial market volatility.
Williams praised the EPF’s effective portfolio diversification strategy, which has proven successful. The improvement in EPF’s performance is attributed to a robust investment strategy, divestment of underperforming assets, and strong returns from overseas investments. He noted that the interim results from EPF have been strong, driven by a sound investment strategy, portfolio rebalancing, and substantial overseas returns.
Looking ahead, Yeah projected that the EPF will adeptly navigate the ongoing global uncertainties with its sound and resilient portfolio allocation strategies. He expressed concern that unpredictable policies from United States President Donald Trump could disrupt the global economy and financial markets, posing challenges for the EPF to maintain last year’s performance. However, as long as the EPF continues to deliver dividend payouts higher than the inflation rate and outperforms other retirement funds, its members’ retirement savings will remain secure.
Williams also expressed optimism that despite the uncertainties in the economic environment, global headwinds would eventually subside. He projected the positive performance to persist into 2025.