EPF dividend creeps up to 5.85pc for 2010, says source

KUALA LUMPUR, Feb 7 — Malaysia’s largest pension fund, the Employees Provident Fund (EPF), is expected to announce a slight dividend increase to 5.85 per cent for 2010, a source has told The Malaysian Insider.

It is understood that the 0.2 per cent increase was decided at a board meeting last month.

“Yes, it is not as high an increase as the year before,” the source said, referring to the jump from 2008’s 4.5 per cent to 5.65 per cent in 2009.

The rate was decided based on returns from EPF’s investments, the source added but did not reveal the fund’s profits for last year.

In 2009, EPF made a record RM19.63 billion in net profit.

The source said the investment panel had suggested the figure to the board last month and it was now awaiting approval from the Finance Ministry.

By convention, the finance minister will approve EPF’s recommendation and the announcement is expected later this month or early March.

In previous years, EPF had announced dividends of 5.8 per cent for 2007, 5.15 per cent for 2006 and 5 per cent for 2005. The highest dividend rate it has paid out was 8.5 per cent in 1983 and 1986.

According to previous reports, EPF’s investments recorded a 5.12 per cent increase to RM5.75 billion in the third quarter ending September 30 last year.

This was based on an investment outlay of RM425.49 billion.

EPF had also earned RM5.55 billion in the first quarter, a 70 per cent increase year-on-year, and RM5.93 billion in the second quarter.

The fund has around 6.3 million contributors.

Unionists had asked last year for government guarantees on workers’ contributions as the Najib administration had asked the EPF to invest more on the local and foreign fronts.

They say it appeared that the government was dependent on EPF funds in Budget 2011 where it was allowed to triple investments abroad to 20 per cent from seven per cent previously.

The pension fund is also involved in re-developing the Malaysian Rubber Board (MRB) land in Sungai Buloh and a RM23 billion bid to take toll operator PLUS Expressways Bhd private with UEM Group Berhad.

Historical of Malaysia's Employee Provident Funds Dividend Rate (Year 1952 - 2010)