Higher EPF Dividend Likely at 6.2% for 2024

The Employees Provident Fund (EPF) is expected to declare higher dividends of at least 6.2% for 2024, driven by the recovery of both global and domestic markets.

This exciting news reflects Malaysia's improving economic landscape, which benefits both employers and employees.

Here’s everything you need to know about the expected EPF dividend and its impact on your business.

What Is an EPF Dividend?

EPF dividends are the annual returns credited to members’ accounts based on the fund's investment performance.

These dividends come from the EPF’s profits, generated through investments in:

Local and international stock markets
Fixed-income assets like bonds and sukuk
Real estate and infrastructure projects

Projected EPF Dividend for 2024

Experts predict EPF will declare dividends ranging from 5.8% to 6.2% for conventional savings and 5.4% to 5.6% for Shariah-compliant savings.

This is a significant increase from the 5.5% dividend declared in 2023 for conventional accounts and 5.4% for Shariah savings.

According to Dr. Nik Ahmad Sufian Burhan from Universiti Putra Malaysia, the strong performance is due to:

Improved market conditions
Higher returns from fixed-income assets
A stronger ringgit reducing foreign investment losses

Key Factors Behind Higher EPF Dividends

1. Improved Global and Local Markets

The global economy, especially in the US and Europe, showed positive growth. Locally, Bursa Malaysia performed well, contributing to EPF's strong investment income.

2. Higher Fixed-Income Returns

EPF's heavy investment in bonds and sukuk resulted in stable and higher returns due to steady interest rates.

3. Strong Malaysian Economy

Malaysia's economy grew by 5.3% in Q3 2024, driven by robust private-sector investments, strong exports, and domestic demand.

4. Active Fund Management

EPF strategically shifted investments towards high-return sectors while reducing exposure to weaker areas.

Its expansion into real estate and infrastructure has also ensured long-term steady returns.

EPF's Impressive Investment Income

EPF recorded a total investment income of RM66.99 billion in 2023, marking a 29% increase from RM51.91 billion in 2022.

For the first nine months of 2024 alone, EPF posted an investment income of RM57.57 billion, up 20% from the same period in 2023.

In 2023, EPF declared:

5.50% dividend for conventional savings with a payout of RM50.33 billion
5.40% dividend for Shariah savings with a payout of RM7.48 billion
Total payout of RM57.81 billion for 2023

Why This Matters to Employers

Boosts Employee Morale: Higher dividends mean better retirement savings, motivating employees.
Economic Confidence: Strong dividends reflect Malaysia's stable economy, promoting business growth.
Employer Branding: Offering EPF benefits with strong returns helps attract and retain top talent.

What to Expect Next

The final EPF dividend announcement is expected in early March 2024. The projected higher dividends are a sign of Malaysia's economic resilience and the EPF's strong fund management.

Sources:

Plan Your Next Hiring with AJobThing

Start your hiring journey with Ajobthing today! Post your job ads, connect with top talents, and streamline your recruitment process with our easy-to-use platform.