EPF lower dividend for 2019 “relatively fair”, says MTUC

Malaysian Trades Union Congress (MTUC) logo

KUCHING, Feb 22: The Malaysian Trades Union Congress (MTUC) said this year’s lower Employees Provident Fund (EFP) dividend was ‘relatively fair’ considering the pressing economic challenges in Malaysia and globally which continue to impact the returns on EPF’s investments.

However, MTUC president Dato Abdul Halim Mansor urged for the retirement fund to strive harder for better returns in the future.

EPF announced a dividend of 5.45 per cent for 2019, with a payout amounting to RM41.68 billion for its conventional saving.

With this, the EPF delivered 2.95 per cent about what was mandated under the EPF Act 1991, which requires it to declare at least 2.5 per cent nominal dividend every year.

However, the rate was lower than the 6.15 per cent given out for 2018.

“As such, MTUC acknowledges EPF’s heavy responsibility in deciding the 5.45 per cent dividend as a fair return to the fund’s contributors, based on the returns from its investments impacted by economic uncertainties,” Abdul Halim said in a statement today.

On the domestic front, he noted that the KLCI had dropped by about 6 per cent the whole of last year, making the nation’s stock market among the worst performers in this region.

“The showing reflects directly on the difficulty faced by EPF in giving out higher dividend to the contributors.

“The local equity market was also weak. Globally, geopolitical developments and the US-China trade war were among the factors that stunted the global economy,” he said.

Nevertheless, Abdul Halim said MTUC was confident EPF will take appropriate measures to see if its investment policies can be strengthened to tackle the economic headwinds ahead to ensure better returns from 2020 onwards.

“In this regard, MTUC calls on the government to give EPF all the leeway it needs to invest abroad more aggressively to offset any down turn in the domestic economy.

“Returns from investments abroad have been very positive for EPF, enabling it to announce satisfactory dividends for 2019 despite the daunting economic environment,” he suggested.

He added that MTUC was confident that EPF will scrutinise and if needed, make improvements to its internal processes and procedures to approve investments locally and abroad to maximise returns for better dividends.

At the same time, Abdul Halim also urged the government to ensure national policies were continually reviewed and improved to bring about an environment that will stimulate investment and raise the productivity of workers.

“Dynamic policies must be put in place to address the challenges of the digital era in a world without borders. This will help elevate Malaysian companies and GLCs (government-linked companies) into truly competitive global players and, at the same time, help EPF achieve better returns,” he added. —DayakDaily