PETALING JAYA: Given the devastating effect the Covid-19 pandemic has had on the economy, economists and Malaysians have welcomed the Employees Provident Fund’s dividend payout for 2020. EPF had declared dividends of 5.20% for Conventional Savings and 4.9% for Syariah Savings for 2020, with a total dividend payout of RM47.64bil.
Sunway University Business School economics professor Dr Yeah Kim Leng said given the downturn of the economy in 2019, the financial performance of companies or funds typically would be affected.
However, Yeah said contrary to expectations, EPF managed to sustain its performance close to its 2019 levels, adding that its performance in 2019 should not be compared to its performance in 2020 due to the economic recession that the Malaysian economy had encountered.
“It is a highly commendable performance, especially for a pension savings fund given the prevailing low interest rates globally and domestically.
“The 5.2% dividend is in fact, taking into consideration the negative inflation, the real returns are actually higher and it actually far exceeds the returns one can receive from fixed deposits as well as other safe or low-risk investments, ” he said yesterday.
Yeah also dispelled fears over the withdrawals of the i-Sinar and i-Lestari schemes.
“The withdrawals will reduce the fund size, but given that EPF’s fund is nearing RM1 trillion, it is actually harder to manage such a big fund as well as harder to sustain and maintain a return performance of such a large size fund because of the relatively small domestic market and also given the volatility in the global financial markets, ” he added.
Alliance Bank chief economist Manokaran Mottain said the dividend payout was reasonable but believed that it could have been better considering that markets had been doing well.
“Despite the growth, acceleration or recessionary pressures, the market has remained quite well. I believe dividends could have been better than last year.
“But as long as it is not below 5%, I think there is nothing to complain about, ” he said.
Meanwhile, Malaysians were also delighted with the 5.2% dividend payout.
A communications executive who only wanted to be known as Rasslyn said that it was a bonus during this economic uncertainty.
She had earlier thought that the dividend declared would have been less than 5%.
“I’m delighted with the dividend, although it is the lowest for over a decade. But considering the economic challenges being faced all over the world, it is a bonus, ” the 39-year-old said.
Rasslyn said she would look into investing more EPF money in the approved unit trust funds.
“I’m doing more research on this. I have invested my EPF money but in small amounts before this and saw very good returns. So I want to maximise what I can potentially get from my EPF money. Of course, I will be cautious, ” she added.
On Facebook, Malaysians, too, have praised EPF’s performance.
Nadarajah Kulanthaiappan said EPF did a good job managing its funds despite the uncertainty.
“They were still able to declare a good dividend, ” he said.
Radzlan Ahmad Suhaimi also concurred, considering the effects of the pandemic.
Vinod Tynan Greig also said he was glad with the dividend payout.
“At least the returns are still decent. Every ringgit earned counts!” he said.