17 March 2009

The Star: EPF declares 4.5% dividend for 2008

Reading this newspaper article initially, my impulsive reaction was 'WTF?!' However, after considering the world's economic situation as well as M'sia DPM cum Finance Minister's speech when tabling the 2nd Stimulus Package, I speculate that perhaps a smoothing mechanism is in effect in view of the envisioned poor investment returns in the future. What it means is that, despite poor returns in the future, EPF may still be able to declare a respectable rate in the coming year. It really depends on one's personal preference, whether to receive a big return now & say, half of the current rate next year, or a somewhat similar rate of return for both years. It is psychological, in some aspect. For me, perhaps this smoothed return is better to manage reasonable expectation in the longer run. What about you?

The Star Online
Tuesday March 17, 2009

EPF declares 4.5% dividend for 2008

PETALING JAYA: The Employees’ Provident Fund (EPF) Board declared a 4.5% dividend yesterday for its members, blaming the lower rate of returns on the global economic crisis.

EPF declared a 5.8% dividend in 2007.

However, despite the financial meltdown, EPF recorded its highest ever earnings of RM20bil in gross income last year, up 9.36% from the RM18.29bil recorded previously.

“While last year was challenging due to the unprecedented global financial crisis that has impacted economies worldwide, EPF’s investment portfolio for the year performed better at the gross income level compared to 2007.

“But due to the sharp decline in the equity markets, a large provision has to be made, resulting in marked reduction in net income,” said its chairman Tan Sri Samsudin Osman.

The dividends will be credited into members’ accounts on March 23.

Till later, live long & prosper.

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