Tax expert Koong Lin Loong expects the 2023 dividend payout to be slightly higher than the previous year’s 5.35% on grounds of improved investment income during the first nine months of last year (9M 2023) as performance picked up in the aftermath of the COVID-19 pandemic period.
“(However), the likelihood for the 2023 EPF dividend to exceed 6% is slim,” the managing partner of Reanda LLKG International Chartered Accountants was quoted as saying by Sin Chew Daily (English version).
“In simple term, it is better than the previous year but EPF members should not have too high an expectation.”
For the record, the retirement fund posted a total investment income of RM47.86 bil for the nine months ended Sept 30, 2023 (9M 2023) or an increase of 33% from the RM36.04 bil during the same period in 2022.
“The amount was after netting off listed equity write downs recorded for the period,” the retirement fund noted in a statement dated Nov 16 last year.
“Out of the RM47.86 bil total investment income, RM4.62 bil were generated from mark-to-market (MTM) gains of securities that have not been realised. The MTM gains were mainly due to the fluctuation of foreign exchange rates.”
Even as the unemployment rate has declined, Koong pointed out that EPF is still reeling from the “lost funds” effect – referring to the four times of special withdrawals during at the height of the COVID-19 pandemic – which have not been channelled back to the retirement fund.
“To declare the dividend payout of 6%, EPF will have to maintain current dividend payout as well as deliver a better performance in its investment portfolios for one to two years,” envisages the treasurer-general cum chairman of the Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) small and medium enterprise (SME) committee.
In recent times, EPF has declared a dividend of 5.35% for 2022, 6.1% (2021), 5.2% (2020), 5.45% (2019) and 6.15% (2018). The highest dividend payout was 6.9% declared for 2017 while the lowest was 5.2% for 2020 given the adverse effect to investment climate brought about by the COVID-19 pandemic.
~ original published by Focus Malaysia (https://focusmalaysia.my/tax-expert-predicts-2023-epf-dividend-rate-at-below-6-yet-higher-than-previous-years-5-35/)
dated 23rd Feb 2024