EPF announces 5.5% dividend and RM57.81 billion payout for 2023, surpassing 2022’s distributions

KUALA LUMPUR, MALAYSIA: The Employees Provident Fund (EPF) has declared a higher dividend rate of 5.50% for conventional savings for the financial year ending 31 December, 2023 (FY2023), marking an increase from 5.35% in FY2022.

This has resulted in a total payout of RM50.33 billion, showcasing a promising outlook for EPF members.

Moreover, the dividend rate for Shariah savings has also seen a commendable rise to 5.40% from the 4.75% recorded in FY2022, resulting in a total payout of RM7.48 billion.

The combined total payout for FY2023 sums up to RM57.81 billion (US$12.21 billion), which is poised to benefit over 16 million EPF members, including individuals from both the formal and informal sectors, according to a statement released on 3 March.

EPF Chairman Tan Sri Ahmad Badri Mohd Zahir said the overall market volatility in 2023 underscored the importance of its robust investment strategy and prudent risk management.

In terms of financial performance, for FY2023, the retirement savings fund reported a substantial total investment income of RM66.99 billion, marking a notable 29% increase from RM51.91 billion in 2022.

“Out of the RM66.99 billion in total investment income, RM5.72 billion were generated from mark-to-market (MTM) gains of securities that have not been realised and will not be part of the dividend distribution.

“It has been the EPF’s prudent practice of paying dividends only out of realised income,” EPF in a statement said.

The EPF’s investment assets have demonstrated robust growth, reaching RM1.135 trillion in 2023, marking a significant increase of 13% from RM1.0 trillion in FY2022.

This increase comprises income from the portfolio and a healthy collection of contributions amounting to RM97.56 billion in 2023, reflecting a 15% increase from RM84.78 billion in FY2022.

EPF Chairman Tan Sri Ahmad Badri Mohd Zahir emphasized that after accounting for inflation, the real dividend for conventional savings stands at 2.89%, while for Shariah savings, it stands at 2.51% on a rolling three-year basis (2021-2023).

This exceeds the EPF’s strategic target of at least 2.0% real dividend over the same period.

He said despite facing challenges such as geopolitical tensions, elevated interest rates, inflation, regional conflicts, and issues in China’s property sector, the global economy showcased resilience and performed better than anticipated.

Ahmad Badri attributed the improved dividends to the EPF’s resilient performance in 2023, with equities playing a pivotal role in driving overall performance.

While acknowledging the varied performance of the global equities market in 2023, with developed markets exhibiting positive growth and regional markets experiencing declines, Ahmad Badri credited EPF’s strategic asset allocation (SAA) and active portfolio management for achieving positive results for 2023.

Looking ahead, he expressed confidence in the EPF’s resilient investment approach and unwavering focus on long-term value creation.

He affirmed the EPF’s commitment to delivering strong performance and upholding its responsibility to its members.