KUALA LUMPUR: The Employees Provident Fund (EPF) has declared a dividend rate of 6.15% for Simpanan Konvensional 2018, with payout amounting to RM43 billion and 5.9% for Simpanan Shariah 2018, with a payout amounting to RM4.32 billion.
In total, the payout for 2018 amounts to RM47.31 billion, a marginal decrease of 1.7% from 2017.
“With a real dividend of 3.93% for Simpanan Konvensional and 3.68% for Simpanan Shariah on a rolling three-year basis respectively, the EPF has exceeded its mandate of delivering a dividend of at least 2.5% on a yearly basis and at least 2% real dividend on a rolling three-year basis,” the EPF said in a statement today.
“We are very grateful and pleased that we have been able to consistently meet our two strategic investment targets.
“Beyond the anticipated nominal dividends, more importantly is that we consistently deliver above-inflation returns so that we are able to preserve and enhance the value of our members’ savings over the long term and help them achieve a better retirement future,” its chairman, Samsudin Osman said.
This, he said, was despite 2018 being a difficult year, marked by volatility and a downward trend in global markets, due to the long-standing US-China trade war and four rounds of US interest rate hikes in the year alone.
“Nonetheless, we remained focused on our long-term strategy and our portfolio diversification has provided resiliency and delivered commendable returns to our members,” he said.
Gross investment income for 2018 was RM50.88 billion, out of which a total of RM4.62 billion was attributed to Shariah Savings, proportionate to its share of total shariah assets, while RM46.26 billion was attributed to Conventional Savings.
The lower income for EPF’s shariah portfolio in 2018 was due to the underperformance of the telecommunications, construction and oil and gas sectors in the domestic portfolio.
The dividend payout for each account was derived from total gross realised income for the year after deducting the net impairment on financial assets, unrealised gains or losses from intercompany transactions, investment expenses, operating expenditures, statutory charges, as well as dividend on withdrawals.
The payout amount required for each 1.0% of the dividend in 2018 was RM7.72 billion, which is higher compared with RM7.02 billion in 2017.
In accordance with the implementation of the Malaysian Financial Reporting Standards 9 (MFRS 9), which came into effect beginning Jan 1, 2018, capital gains on disposal of equity amounting to RM18.21 billion for 2018 will flow directly to Retained Earnings from the Statement of Other Comprehensive Income, instead of the Statement of Profit and Loss as under the previous MFRS 139.
In addition, under MFRS 9, the EPF will no longer recognise any impairment on its listed equity holdings, he added.