EPF'S COMMENDABLE DIVIDEND PAYOUT TO SPUR ECONOMIC ACTIVITIES, SUPPORT NATIONAL GROWTH -- ECONOMISTS

By Anas Abu Hassan

KUALA LUMPUR, March 1 (Bernama) -- The Employees Provident Fund's (EPF) move to pay a 6.30 per cent dividend for 2024 is expected to stimulate economic activities and contribute to national growth, according to economists.

Malaysian Economic Association president Dr Yeah Kim Leng said the seven-year-high dividend will boost the savings of over 16 million EPF members, thereby enhancing their future well-being.

“It will also contribute to higher withdrawals for those eligible, thereby increasing the velocity of money when spent or invested and, in turn, boosting economic activities,” he told Bernama.

Earlier today, the EPF announced a higher dividend rate of 6.30 per cent both for the conventional savings and shariah accounts for 2024, involving a combined total payout of RM73.24 billion.

It attributed the better dividend performance to recovering global and domestic markets, resilient economic growth, and sound portfolio management.

For the year ended Dec 31, 2024, the fund recorded a total investment income of RM74.46 billion, an 11 per cent increase from RM66.99 billion in 2023.

Meanwhile, economist Prof Geoffrey Williams noted that the higher dividend will raise the balances in the accounts of EPF members who have been active.

“This could increase transfers into Akaun Fleksibel, leading to higher consumption this year and supporting economic growth,” he said.

EPF’s diversification strategy proven effective

According to Yeah, with the dividend rate for 2024 that is around twice the average fixed deposit rate, the EPF’s performance is highly commendable not only for the superior returns but also for its consistency in generating high returns annually.

“The strong and stable performance is also the envy of many pension and investment funds within and outside Malaysia considering the rise in global uncertainties and financial market turbulence,” he added.

Similarly, Williams lauded the EPF's strategy in its portfolio diversification as it has been proven to be effective.

“The EPF's improved performance is attributed to a robust investment strategy, divestment of underperforming assets, and strong returns from overseas investments.

“So far, the interim results from EPF have been very strong, driven by a good investment strategy, rebalancing of the portfolio and strong overseas returns,” he said.

Navigating global uncertainties and 2025 prospects

On prospects, Yeah said the EPF is projected to navigate deftly the ongoing global uncertainties with its sound and resilient portfolio allocation strategies.

He opined that United States President Donald Trump’s unpredictable policies could disrupt the global economy and financial markets, making it challenging for the EPF to sustain last year’s performance.

“As long as the EPF is able to generate a dividend payout that is higher than the inflation rate and outperforms other retirement funds, its members’ retirement savings pool remains intact,” he added.

Williams opined that global headwinds would eventually ease despite the uncertainties surrounding the economic environment.

“We can expect the good performance to continue into 2025,” he said.

-- BERNAMA