EPF can afford more than 6.15% dividend

So, according to the bosses (Malaysian Employers), the Employees Provident Fund, EPF, can actually afford to pay more than the declared 6.15% dividend for 2012.

Looking at the impressive performance of the fund, who wouldn't agree with the employers federation's statement. In fact this should be the avenue for the government to show appreciation to the workers in the private sector. Also, to those who did not qualified for the BR1M sweetness. These contributors pay tax and part of the tax monies are given to Malaysians who earn RM3,000 and less.

Remember, this category of people (earning more than RM3,000) are actually left out of the BR1M and BR1M 2.0 payouts. They are discontented and some are cursing their 'luck' for earning RM3,001 and are unable to get the same benefit enjoyed by those earning RM2,999.

Why not give them a little bit more through dividend distributions? After all the dividend will be kept intact in the pension fund account as contributors cannot withdrawn them until they are retired.


Other thoughts on the 6.15% EPF Dividend declared for 2012 a new record.

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Dividend Should Be Higher
TheStar, Feb 19

PETALING JAYA: While welcoming the 6.15% dividend announced by the Employees Provident Fund (EPF), several groups say an even higher amount should be declared.

Malaysian Employers Federation executive director Shamsuddin Bardan said the return on investment stated in the EPF report was very impressive.

“However, based on those figures, we feel that the dividend paid to contributors should also be higher,” he said.

As a huge profit was made on investments using contributors' money, he said the dividend given should reflect this.

Fomca CEO Datuk Paul Selvaraj said EPF contributors had benefited from the sound investments made.
“As long as the EPF makes good investments with good returns, the contributors will continue to benefit,” he said.

Gerakan vice-president Datuk Mah Siew Keong, in a statement, said the high dividend rates should encourage more self-employed workers to contribute to the 1Malaysia Retirement Savings Scheme which provided the same benefits as EPF.

“It is indeed unfortunate to see many self-employed individuals such as hawkers, farmers, fishermen and even housewives being unable to enjoy what normal employees receive from the EPF,” he said. Mah urged EPF to create more awareness about the scheme to attract more workers without a fixed monthly income.

Meanwhile, EPF members are celebrating the 6.15% dividend declared for last year. Many logged on to their EPF i-accounts in the morning of February 18, after the declaration was reported.




Refer: The Star Online

6.15% EPF dividend for 2012 a new record

Dividend of 6.15% for 2012 is the highest since 2000. The last time it was more than 6% was in 1999 (6.84%) and highest dividends saw EPF distributing 8.5% to members every year from 1983 to 1986.

Starting Feb 18, 2013, members can get a statement of their accounts showing the credited dividends at EPF kiosks, counters or through i-Account while those aged 55 years and above can also withdraw the dividends.

               Year        Dividend

                2000     -    6.00%
                2001     -    5.00%
                2002     -    4.25%
                2003     -    4.50%
                2004     -    4.75%
                2005     -    5.00%
                2006     -    5.15%
                2007     -    5.80%
                2008     -    4.50%
                2009     -    5.65%
                2010     -    5.80%
                2011     -    6.00%
                2012     -    6.15%

*      *      *      *      *      *      *      *      *      *      *      *      *      *      *      *

EPF declares 6.15 per cent dividend for 2012

KUALA LUMPUR (Feb 17, 2013): The Employees Provident Fund (EPF) has declared a dividend of 6.15 per cent for the financial year ending Dec 31, 2012, the strongest results in early millennium.

Its chairman, Tan Sri Samsudin Osman said the rate was 15 basis point higher than six per cent paid in 2011.

"It is also a new record for RM27.45 billion will be disbursed to EPF members, up 12.20 per cent from RM24.47 billion distributed the previous year.

"EPF also recorded the highest gross investment income of RM31.02 billion in 2012, an increase of 13.91 percent compared to 2011," he said in a statement.

He said despite increasingly complex investment environment, the EPF maintained a steady upward momentum to record the strongest results since the early millennium, supported by effectiveness of long-term investment strategy, and disciplined and prudent approaches.

In addition, he said in line with the Strategic Asset Allocation practised by the EPF, most of its asset investments continued to be confined to low-risk fixed-income and stable instruments.

He said equity investment made up 38.77 per cent of the total asset investment in 2012 while the remaining 3.59 per cent and 2.42 per cent respectively were in money market instruments, and real estate and infrastructure.

Samsudin said EPF investment assets as at 31 Dec, 2012 amounted to RM526.75 billion, surpassing half a trillion ringgit and increased 12.31 per cent from RM469.04 billion recorded the previous year. - Bernama

Source: The Sun Daily

Malaysians not ready to retire?

Do you know that 4 out of 5 of today’s retirees in Malaysia worry about:

1. being poor and in need of money,
2. becoming a burden on their children, and
3. being “in ill health and having no one to care for them”

That is according to a recent survey.

All this point to the need for Malaysians to better plan and secure their financial position towards retirement. Would the implementation of the retirement age at 60 be of much help? If 55 years is not good enough a number, then neither is 60.

        Not ready to retire at 55, how about 60? Image: Seniors Aloud


The following article - a couple of days ago - by Bernama suggests that Malaysians may not be financially ready to retire:-


KUALA LUMPUR(Bernama): A study on retirement trends in East Asia has revealed the increasing vulnerability of Malaysians due to early retirement age as well as low rates of pension receipt under the Employees’ Provident Fund and the lack of old-age poverty floor.

The study report, “Balancing Tradition and Modernity: The Future of Retirement in East Asia”, is based on a survey that the Centre for Strategic and International Studies (CSIS) conducted in Malaysia, China, Hong Kong, Singapore, South Korea and Taiwan, according to Prudential in a statement on the survey findings.

The CSIS East Asia Retirement Survey reveals that an astonishing 92 per cent of current retirees in Malaysia report that they had already left the workforce by age 60 and suggests that Malaysia’s pattern of premature retirement will likely persist. Malaysia is the only country in the survey whose fertility rate is above the 2.1 replacement level and the only one that will have a growing population and workforce in the coming decades, the report said.

“In China, the elderly share of the population will be approaching 30 per cent by 2040 — and in Hong Kong, Singapore, South Korea and Taiwan it will be approaching 40 per cent. In Malaysia, it will still be under 20 per cent,” it said.

Malaysia’s early mandatory retirement age, however, offsets its demographic advantage in building an adequate and sustainable retirement system, it added. Co-authored by Richard Jackson and Neil Howe, it is part of the multilayer Global Ageing Preparedness Project, which was launched by CSIS and British insurance giant Prudential plc in 2010.

The survey found four out of five of today’s retirees in Malaysia worry about “being poor and in need of money,” becoming “a burden on their children,” and being “in ill health and having no one to care for them” — much larger shares than in any of the other survey countries.

Their vulnerability is attributable to Malaysia’s unusually early retirement ages, which leaves retirees at risk of outliving their savings, as well as to low rates of pension receipt under the EPF and to the lack of an age-old poverty floor, the survey said. Retirement prospects are improving for the younger generations, who expect to be less dependent on the extended family than today’s retirees are and to rely more heavily on their own savings, it said.

But with one in five current workers still expecting to receive no pension benefits of any kind, the outlook for many is far from secure, it added. Donald Kanak, Chairman of Prudential Corporation Asia, which is part of Prudential plc, said: “Responding to the challenges caused by an ageing population is critical to Asia’s future.

“It is critical that policy makers and the industry work together to address this vital question.”

Charlie Oropeza, Chief Executive Officer of Prudential Assurance Malaysia Bhd, said: “The findings of the CSIS Study reinforce the need for Malaysians to better plan and secure their financial position towards retirement.

“While the policymakers as well as the Malaysian Government have been introducing frameworks such as the Financial Blueprint to provide greater length and breadth of financial products and services, Malaysians need to be more aware and make themselves financially ready through prudent investment decisions.