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EPF declares dividend more than 6% for 2021, above pre-pandemic 2019 👍

2 March 2022

The Employees Provident Fund (EPF) declared a 6.1% dividend for conventional savings and 5.65% dividend for shariah savings for 2021.🎉🎊

Pre-pandemic 2019 dividend was 5.45% (conventional) and 5% (shariah).

Photo from FMT

Total distributions hit a new all-time high of RM57.1 billion despite unprecedented Covid-19-related withdrawals hitting growth in its fund size, beating the previous all-time high of RM48.13 billion in 2017.

The EPF’s 2021 dividend rate is significantly higher than 2020’s rate of 5.2% and 4.9%

According to the EPF, its overall investment assets grew to RM1.008 trillion in 2021, up 0.8% year-on-year from RM1 trillion in 2020. In February 2021, the EPF said its overall investment assets grew 7.9% to RM998 billion from RM924.75 billion in 2019.

The significantly slower growth in its total investment assets, despite strong investment performance, was owing to Covid-19-related withdrawals, including the unprecedented i-Sinar Account 1 withdrawals totalling RM58.7 billion.

The EPF could experience its first net withdrawal, where the amount of funds deposited into the EPF is less than total withdrawals for the year.

Some 7.3 million EPF members had applied for at least one or all three of the Covid-19-related special withdrawals — i-Lestari, i-Sinar and i-Citra — that collectively saw RM100.9 billion withdrawn from the EPF between April 2020 and February 2022, EPF data show.

The EPF had previously said the withdrawals severely eroded retirement savings for a sizeable group of members.

Around 6.1 million members had less than RM10,000 in their EPF accounts, out of which 3.6 million had less than RM1,000, the EPF said in a statement dated Dec 28, 2021. That's severely short of the EPF's basic recommended savings of RM240,000, which works out to only having RM1,000 a month for 20 years after retirement❗

The EPF added that the number of aged persons needing government assistance are expected to increase rapidly from 3.5 million in 2021 to 5.3 million (15% of population) by 2030 and 7.4 million (21% of population) by 2042.

(Source: TheEdgeMarkets)

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