Malaysia’s Employees’ Pension Fund (EPF) has announced a record dividend of 6.3% for the year 2024, the highest in seven years. This exceptional result is attributed to the recovery in stock markets and prudent portfolio management. The total dividend amounted to RM73.24 billion (approximately US$16.4 billion), split between RM63.05 billion for conventional economies and RM10.19 billion for Shariah economies. This article explores the factors that contributed to this success, the implications for EPF members and the economic outlook for Malaysia.
Success factors: Rising markets and prudent management
The EPF’s exceptional performance is mainly due to the recovery in stock markets, both local and international. The growth of 12.7% in the Malaysian stock market and 17% in the global market has enabled the EPF to generate significant returns on its investments. In addition, the prudent portfolio management and diversified investment strategy contributed to this success. The EPF was able to benefit from Malaysia’s resilient economic growth, with a GDP growth rate of 5.1% in 2023.
The separation of the Simpanan Konvensional and Simpanan Shariah portfolios in 2024 also allowed the EPF to manage these two funds independently, facilitating the adoption of investment strategies tailored to each market. This flexibility helped to improve returns and align the performance of the two portfolios, with identical dividends of 6.3% for 2024.
Economic impact: Record dividend and national growth
The EPF’s record dividend not only has a positive impact on members’ economies, but also contributes to national economic growth. According to Finance Minister II, Datuk Seri Amir Hamzah Azizan, the EPF’s performance is a key indicator of the resilience of the Malaysian economy in the face of global uncertainties. The government’s pro-growth policies, combined with infrastructure investments, have boosted business confidence and supported key sectors such as manufacturing and services.
Furthermore, the increase in voluntary contributions to the EPF reflects a positive trend among Malaysians, who are increasingly choosing to build up sufficient savings for retirement. This reflects a growing awareness of the importance of long-term financial planning and increased confidence in the Malaysian pension system.
