The EPF reported a dividend of 5.45 per cent with a payout amounting to RM41.68 billion for Simpanan Konvensional for 2019. File Photo
KUALA LUMPUR: The Employees Provident Fund (EPF) delivered a solid performance for 2019 in terms of both its operational and financial results, allowing it to declare a dividend of 5.45 per cent with a payout amounting to RM41.68 billion for Simpanan Konvensional.
With this, the EPF delivered 2.95 per cent above what is mandated under the EPF Act 1991, which requires it to declare at least a 2.5 per cent nominal dividend every year.
On top of that, the EPF’s three-year average dividend for Simpanan Konvensional after adjusting for inflation, stood at 4.33 per cent – 2.33 per cent above the fund’s three-year rolling target of two per cent.
The EPF’s overall investment assets grew to RM924.75 billion as it experienced a 2.8 per cent growth in membership to 14.6 million while its registered employer base expanded by three per cent to 522,300 employers. There was also a 24.6 per cent rise in i-Akaun subscribers to 7.6 million.
2019 also saw the EPF making significant strides in its efforts to improve its offerings to members. It launched i-Invest in August 2019 to help members make informed decisions on unit trust investments, which saw over 10,000 members making transactions worth RM81.8 million in value.
EPF chief executive officer Alizakri Alias said that as anticipated, EPF saw substantially more volatility in 2019 as compared to 2018.
“Certainly 2019 exemplified what it means to be living in a ‘Volatility, Uncertainty, Complexity and Ambiguity’ (VUCA) world. Many issues in the global markets remained unresolved, but we also saw some new issues cropping up. There were three rate cuts made by the US Federal Reserve, the US-China trade spat escalated and continues to be unresolved, and there were uncertainties surrounding the Brexit negotiations. On top of this, we did not expect the Hong Kong protests to be prolonged and that certainly added pressure on an already fragile far-east market,” he said.
Alizakri said that in addition, the domestic markets did not support the income-generating capabilities of the EPF as 70 per cent of the fund’s assets are in Malaysia, with a major part of assets in domestic equities.
“Nonetheless, our Strategic Asset Allocation and decision-making structure provides a robust system that guides and shields us from the storms. Thanks to this we fulfilled the mandate from our members of preserving and growing their capital, and we are pleased to deliver results which have turned out better than we had initially projected.
“Much of this achievement can be attributed to the long-term diversification strategies we have consistently pursued, which have ensured that we did well in spite of the difficult conditions,” he added.
Alizakri informed that EPF has always held that overseas holdings are an essential and important part of their overall portfolio, and have already announced on several occasions of their intentions to continue these diversification efforts to reduce concentration risks.
Alizakri also expects that 2020 is going to be just as or even more challenging than 2019, with the full impact of the Coronavirus Disease (COVID-19) likely to drag down already soft global growth.
“The US-China trade war still sees no signs of ending, among other risks to economic recovery. We hope that the domestic markets will be resilient, especially in light of the soon-to-be-announced government stimulus package which should help support investor and consumer sentiment,” he said.
Alizakri also assured members that the Fund recognises the increasing pressures of the new decade.
“For 2020 and the years ahead we will continue to focus on delivering not only financial dividends, but also on our obligation to provide social dividends for our members. We want our members to be empowered with the knowledge and tools to enable them to live more fulfilling lives while pursuing a better future,” he said.