Higher EPF dividends for 2023? – kopiandproperty.com

Personal Finance 101: Higher EPF dividends for 2023?

Was 2022 a good year for EPF dividends?

The Employees Provident Fund (EPF) recently declared a dividend rate of 5.35% for Conventional Savings and 4.75% for Syariah Savings for the Year 2022, with a total payout amounting to RM51. 14bil. Source: www.principal.com.my

5.35 percent to me is a very good number when compared to the uncertainties in the market and the lower Fixed Deposit Rates in the market. In fact this number is higher than even the home loan rate.

As for 2023, there is now anticipation that it could be even higher than 2022. Wow! Happy for all the EPF members including myself too. Let’s keep our fingers crossed yeah. The money is to be enjoyed later yeah. In the mean time, continue to save, invest and earn more so that we also have money for vacations too.

Article in theedgemalaysia.com  There is a very good chance of dividends at least matching or coming in above last year’s 5.35% for conventional savings, back-of-the-envelope calculations by The Edge show. This forecast is based on the provident fund’s investment performance in the first nine months of 2023, the fact that the overall fund size is growing again without large special pandemic-time withdrawals, as well as its past track record.

Though decent, the 2023 dividend rate is unlikely to top 6% or the 2021 EPF dividend rate of 6.1% (conventional savings) and 5.65% (shariah savings) — unless realised investment returns for the fourth quarter of this year are exceptionally higher than the past three quarters, our estimates show.

Assuming the RM4.79 billion unrealised mark-to-market gains in the first half of the year were all in 2Q2023, the EPF’s realised net investment income in the quarter may have been closer to RM13.24 billion and not RM18.03 billion. If so, its RM14.67 billion net investment income for 3Q2023 would be a quarter-on-quarter improvement rather than the lowest showing in four quarters (see Chart 2). Please do refer to theedgemalaysia.com for a full article with more details and charts too.

What can we do with a higher EPF dividend?

Better not do anything. Haha. Okay, perhaps one dinner to celebrate this fact even if the dividends do not come to us directly but will be added into the savings we have inside EPF. Did you know what’s the minimum dividend percentage which the EPF must provide to all members?

“Under Section 27 of the EPF Act 1991, the guaranteed minimum dividend rate is 2.5% per year on members’ savings.”  Source: ringgitplus.com

2.5 percent is pretty decent even if this seems to be below inflation rate which everyone says is now super high. Actually, it is not but if we just look at the food price alone, it is. As for the food price alone, it also depends on whether people are willing to pay for it or not yeah. All about demand and supply and the willingness of the consumer in paying higher.

Now… let’s wait.

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