PETALING JAYA: Less than a week ago, engineer Ahmad Faizuddin A. Bakar withdrew part of his EPF savings to buy his first house in Bangi, Selangor.
So, news that the Employees Provident Fund would offer a 6.9% dividend for 2017 brought some cheer to him.
“This means I will still have a bit more for my savings,” said the 29-year-old, adding that the higher dividend on his remaining funds would reduce his financial burden when he retires.
In 2016, EPF paid a 5.7% dividend; it was 6.4% in 2015 and 6.75% in 2014.
This year’s higher benefits were attributed to a 5.13% increase in investment income to RM12.95bil in the third quarter that ended on Sept 30, 2017.
Business system manager Siti Nur Rahmah Muhab Shah, 30, is another delighted EPF contributor.
The higher dividend, she said, would mean that she could invest the extra money from her Account 1 in unit trust.
“At the moment, I can use about RM13,000 for unit trust. With the extra dividend, I can use it to further diversify my financial savings,” said the mother of two.
M. Subra, a senior manager at a finance company, also gave his thumbs up to the news.
“I will use the funds to service my housing loans and pay for my son’s education as well as tuition fees,” said the 52-year-old.
MTUC president Datuk Abdul Halim Mansor said the higher dividend would go well with EPF contributors.
“We have been consistent in our stand; we always hoped for a better dividend this year.
“We put across the message to the EPF and to the Prime Minister early this year,” he said.
This latest announcement, he said, showed that the Government had the best interest of workers at heart.
“We know that last year was a tough year for employees due to various factors including the weakening of the ringgit and the uncertainty of the global economy.
“So, with strong returns from the overseas investments made by the EPF, we are happy with such good news,” he said.
Barisan Nasional strategic communications deputy director Datuk Eric See-To said the 6.9% dividend rate was the highest since 1996’s 7.7%.
“After former prime minister Tun Dr Mahathir Mohamad and his deputy Datuk Seri Anwar Ibrahim led the country into the 1998 economic crisis, Dr Mahathir had pegged our currency, and our EPF dividends kept on falling.
“In 1998, it stood at 6.7%, followed by 6.84% in 1999, 6% in 2000, 5% in 2001, 4.25% in 2002, 4.5% in 2003 and 4.75% in 2004. In fact, with the 4.25% in 2002, and 4.5% in 2003, Dr Mahathir has the dubious distinction of being the prime minister who declared the lowest EPF dividend since Malaysia was formed in 1963.
“This is among the reasons why the ringgit should not be pegged by implementing draconian capital controls. It will cause investments to dry up,” he said.
Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said EPF’s higher dividend would lessen the pressure on employers to contribute more for their workers.
“Many employees complained that they do not have enough funds when they retire.
“The higher returns would help ensure employees have sufficient funds when they retire and lower the pressure on employers to contribute for their staff.”
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