No rush for tiered EPF dividends

KUALA LUMPUR: After announcing surprisingly good 2021 dividends for contributors – 6.1% for conventional savings and 5.65% for syariah savings – the Employees Provident Fund (EPF) says it will not rush into implementing a tiered dividend system.

Such a move, which could be gradually introduced to induce people towards a certain behaviour, would have to be studied first, said the fund’s CEO Datuk Seri Amir Hamzah Azizan.

“At this juncture, however, we are not ready and have not put enough thought towards actually carrying this out.

“Despite that, we are open to working towards something that can strike a balance,” he said.

With the dividends announced yesterday, EPF will pay out RM50.5bil for conventional savings and RM6.3bil for syariah savings, making a total payout of RM56.8bil for 2021.

Speaking to reporters after the EPF 2021 Financial Performance Briefing yesterday, Amir said deeper studies would have to be done before a tiered dividend could be introduced.

“If we look at how EPF has operated throughout the years, a measured approach has always been taken,” he said.

Reason to cheer: The EPF 2021 dividends are 6.1% for conventional savings and 5.65% for syariah savings.

On whether EPF could produce similar results this year, Amir said it was too early to ascertain the impact of the current conflict in Ukraine and the ongoing pandemic.

“The key is to understand the long-term implications of these events and ensure we have the agility to move our portfolios to adjust,” he said.

He also noted that EPF currently did not have any direct exposure towards interests in either Ukraine or Russia, adding that the market did gyrate slightly due to the conflict but had since recovered.

He added that EPF was able to make money regardless of whether market conditions were up or down due to its long-term investment horizons.

“For instance, we want to purchase and secure good long-term assets whenever the markets go down,” he said.

Amir said the outlook for dividends in the upcoming year would depend on what returns and portfolios it would hold.

“We were fortunate last year as our foreign investment compositions were fruitful, which resulted in an increase.

“I hope that we (Malaysia) can improve ourselves as well,” he said.

“If EPF sees an opportunity to invest in local institutions to bring about a positive change, it will do so.”