PETALING JAYA: With 10 million active Employees Provident Fund (EPF) members having less than RM120,000 in their accounts, some young and lower-income contributors are eager to grow the balance voluntarily due to the attractive dividend rate.
For these Malaysians, the 6.15% dividend declared by the EPF means modest gains only.
Fresh graduate Muhammad Aiman Hakim, 24, who recently began his first full-time job as a marketing executive, sees the dividend as a long-term incentive.
“My EPF balance is still small, so the dividend doesn’t mean much now,” he said.
“But if returns stay at around 6%, that’s good for our future because it compounds over time.”
Aiman said the 6.15% rate has encouraged him to consider voluntary contributions.
“When you see that kind of return, you think about saving more instead of spending everything,” he said.
Voluntary contributions rose to RM19.2 billion, reflecting a growing awareness of the need to supplement retirement savings.
For administrative officer Anisah Ahmad Fauzi, 27, however, the dividend does little to significantly change her financial standing.
“The 6.15% dividend from the EPF feels a bit lower than last year, so it doesn’t hit as nicely. On paper it’s still okay, but when the rate drops, the extra boost to your savings just isn’t as noticeable.”
Anisah has made only one withdrawal so far – for the downpayment on her first home – but noted that many of her peers regularly tap their savings to service housing loans.
“For people who withdraw EPF every month to pay for their housing loan, the balance earning dividends is smaller, so the payout doesn’t feel big,” she added.
Tuition teacher L. Rajini, 50, said she has completely depleted her second EPF account during periods of slower income.
“The latest announcement means that I can get a bit more in my savings as I do not have much income nowadays,” she said.
“Even if it is only 6.15%, the dividends will be quite a sum for me.”
Rajini said every additional ringgit credited into her first account makes a difference.
“When your income is unstable, you appreciate whatever goes in. It may not look big to others but for me, it helps with peace of mind,” she added.
