WITH the Employees Provident Fund set to announce its dividend rates for 2025 on Saturday (Feb 28), Malaysian workers are eagerly anticipating what returns they'll receive on their retirement savings.
The 2024 dividend of 6.3% for both conventional and shariah savings was the highest since 2017, sparking conversations about EPF's historical performance.
Some have claimed that 7% was the highest dividend rate ever paid out by the fund. But is this true?
Verdict:
FALSE
No, 7% was not the highest EPF dividend payout in Malaysia's history. The actual highest dividend rate was significantly higher at 8.5%, which was maintained consistently from 1983 to 1987, according to figures on the EPF's website.
These high dividend rates occurred during a period when Malaysia's economy was experiencing significant growth and interest rates were generally much higher than today.
The Star reported that since 1963, the pension fund has delivered dividend rates of 5% and higher, with those record highs of 8.5% in the mid-1980s being the exception rather than the norm in recent decades. The only other period when rates dipped significantly was from 2002 to 2004, when dividend rates ranged from 4.25% to 4.75%.
In more recent history, the highest dividend rate in the past decade was 6.9% in 2017. Looking at the decade from 2013 to 2022, rates have ranged from a low of 5.2% in 2020 to that 2017 peak of 6.9%.
For 2024, EPF declared 6.3% for both conventional and shariah savings on March 1, 2025, with a total payout of RM73.24bil benefiting more than 16 million members. This marked the highest dividend rate since 2017 and exceeded many analysts' expectations.
The strong 2024 performance has raised expectations for Saturday's announcement. Experts believe EPF could maintain the dividend rate at 6.3% or possibly reach 6.5% for 2025, despite the fund adopting a more cautious stance over fourth quarter performance, according to The Star.
The numbers support this optimism. EPF recorded a total investment income of RM63.99bil for the nine months ended Sept 30, 2025, an 11% increase from RM57.57bil in the same period in 2024. For the third quarter alone, total investment income rose to RM25.07bil, a 27% jump from RM19.67bil in the third quarter of 2024.
Equities continued to be the largest contributor, delivering RM16.95bil or 68% of the fund's total investment income for the quarter.
The EPF remains one of the world's oldest and largest retirement funds, with investment assets standing at RM1.25 trillion as of the end of 2024. Its diversified investment strategy across equities, bonds, real estate and other asset classes, both locally and internationally, has enabled it to consistently deliver returns that exceed the minimum guaranteed rate of 2.5% per year.
Understanding this historical context is important for retirement planning. Whilst 7% would have been a respectable dividend rate and higher than most recent years, it's not the highest EPF has achieved. That honour belongs to the 8.5% rate maintained during the economic boom years of the mid-1980s, when Malaysia's economy was growing rapidly and interest rates were significantly higher than today.
As EPF members await Saturday's announcement, they can take comfort in knowing that their retirement fund has a strong track record of delivering solid returns over its decades of operation, even if those returns no longer reach the historic highs of the 1980s.
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