PETALING JAYA: The Malaysian Trade Union Congress (MTUC) says the EPF dividend rate for 2019 is relatively fair considering the pressing economic challenges in Malaysia and globally.
MTUC president Datuk Abdul Halim Mansor said that while MTUC was not entirely satisfied with the rate of 5.45% declared, he acknowledged EPF's heavy responsibility in deciding the rate based on the returns from its investments impacted by economic uncertainties.
"On the domestic front, the KLCI had dropped by about 6% the whole of last year, making the nation's stock market among the worst performers in this region. The showing reflects directly on the difficulty faced by EPF in giving out higher dividend to contributors.
"The local equity market was also weak. Globally, geopolitical developments and the US-China trade war were among the factors that stunted the global economy.
"All these developments impacted EPF's investments which resulted in lower dividends for 2019. MTUC is confident EPF will take appropriate measures to see if its investment policies can be strengthened to tackle the economic headwinds ahead to ensure better returns from 2020 onwards," he said in a statement on Saturday (Feb 22).
Abdul Halim, who is also on EPF's board of directors, called on the Government to give EPF all the leeway it needs to invest abroad more aggressively to offset any downturn in the domestic economy.
"Returns from investments abroad have been very positive for EPF, enabling it to announce satisfactory dividends for 2019 despite the daunting economic environment.
"In this context, MTUC is confident that the EPF will scrutinise and if needed, make improvements to its internal processes and procedures to approve investments locally and abroad to maximise returns for better dividends," he said.
He also urged the government to ensure national policies are continually reviewed and improved to bring about an environment that will stimulate investment and raise the productivity of workers.
"Dynamic policies must be put in place to address the challenges of the digital era in a world without borders. This will help elevate Malaysian companies and GLCs into truly competitive global players and, at the same time, help EPF achieve better returns," he said.
Earlier Saturday, the EPF declared a dividend of 5.45% for Conventional Savings in 2019 and 5% for Syariah Savings.
The pension fund said that the payout amounted to RM41.68bil and RM4.14bil, respectively.
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.
Did you find this article insightful?