PETALING JAYA: The Employees Provident Fund (EPF) has declared a dividend of 5.45% for Conventional Savings in 2019 and 5% for Syariah Savings 2019.
The pension fund said that the payout amounted to RM41.68bil and RM4.14bil respectively for both the savings.
This is the lowest dividend rate for the Conventional Savings declared by the pension fund since 2008.
Last year, the EPF declared dividends of 6.15% for Conventional Savings 2018, and 5.9% for Syariah Savings 2018.
The EPF said that its overall investment assets grew to RM924.75bil as it experienced a 2.8% growth in membership to 14.6 million while its registered employer base expanded by 3% to 522,300 employers.
It said that there was also a 24.6% rise in i-Akaun subscribers to 7.6 million.
Chief executive officer Alizakri Alias said that as anticipated, there was substantially more volatility in 2019 as compared to 2018.
"Certainly 2019 exemplified what it means to be living in a 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 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.
"In addition, the domestic markets did not support the income-generating capabilities of the EPF as 70% of the fund's assets are in Malaysia, with a major part of our 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 said in a statement on Saturday (Feb 22).
"The EPF has always held that overseas holdings are an essential and important part of our overall portfolio, and have already announced on several occasions our intentions to continue these diversification efforts to reduce concentration risks".
The EPF Act 1991 requires it to declare at least a 2.5% nominal dividend every year.
As for the Syariah Savings, Alizakri said that its dividends differed from the Conventional Savings because the universe of assets they can invest in is not as wide as that available for the conventional option.
"A majority of the investments were in the domestic markets, which did not perform as well in 2019," he said, adding that the prudent management and fund allocation efforts ensured that they delivered on the targets set for the savings.
Alizakri also said that they would expect 2020 is to be just as or even more challenging than 2019, with the full impact of the Covid-19 virus likely to drag down already soft global growth.