KUALA LUMPUR: The higher Employees Provident Fund (EPF) investment income in the first half of 2025 (1H 2025) is likely to lead to a higher dividend payout for the year, while a sustained rally in global equity markets could further boost third-quarter performance, said economists.
EPF announced today that its total investment income rose three per cent to RM38.92 billion in 1H 2025 from RM37.90 billion in 1H 2024, with the investment income surging 22 per cent to RM20.61 billion in the second quarter of 2025 (2Q 2025) from RM16.91 billion in the same quarter last year.
The largest retirement fund in Malaysia said equities remained the largest contributor to its investment income in 2Q, generating RM13.77 billion -- a 35 per cent increase compared to RM10.23 billion in 2Q 2024.
Putra Business School Professor Dr Ahmed Razman Abdul Latiff said that although there is a possibility to see a higher dividend payout for 2025, judging from 1H 2025’s performance, the percentage increase from a year earlier will likely not be significant.
"This is due to a higher percentage of new contributors and voluntary contributions, which brings higher contributions and therefore, a higher amount of allocation for dividends is needed just to maintain the same percentage, and even more if the dividend is higher,” he told Bernama.
Ahmed Razman explained that the increase in new contributors and voluntary contributions, while reflecting greater awareness among employees about preparing for retirement, also contributes to the higher allocation needed to maintain the dividend percentage.
During 1H 2025, the EPF registered 286,194 new members, raising total membership to 16.4 million.
New employer registrations reached 37,402, increasing total active employers registered with the EPF to 619,662 as at June 2025, while voluntary contributions increased by 55 per cent to RM11.68 billion in 1H 2025 from RM7.55 billion a year earlier.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said EPF’s 1H 2025 performance was supported by the global equities market, which rebounded in 2Q 2025, as in 1Q 2025.
He said this was in comparison to its 1Q 2025 investment income, which fell 13 per cent to RM18.31 billion from RM20.99 billion in the corresponding quarter in 2024.
"Thus far, we have seen the global equities market continue to stage a respectable increase, which should contribute positively to the 3Q performance,” he said.
However, Mohd Afzanizam noted that the degree of economic uncertainties due to the tariff imposed by the United States (US) and geopolitics will continue to shape market sentiments.
"Apart from that, global interest rates are on the way down, indicating that growth momentum worldwide is slowing, which will inadvertently impact EPF’s investment performance,” he said.
Nonetheless, Mohd Afzanizam said that if EPF can maintain a similar dividend rate at a time when market volatility remains apparent, it would be commendable, as the retirement fund’s wealth of experience in navigating challenges, coupled with its disciplined asset allocation strategy, will help it achieve respectable investment returns for the whole of 2025.
In 2024, EPF declared a dividend rate of 6.30 per cent for conventional savings, with a total dividend distribution of RM63.05 billion and 6.30 per cent for Shariah savings, with a total distribution of RM10.19 billion.
The 6.30 per cent dividend rate for both conventional and Shariah savings for 2024 is the highest since 2017. - Bernama
