EPF / KWSP Dividends for Year 2014: 6.75%

epf-dividends-2014

Employees Provident Fund (EPF / KWSP) has declared a dividend rate of 6.75% for 2014 with a total payout of RM36.66bil.

The Employees Provident Fund (EPF) Board, with the approval of the Minister of Finance, today announced a dividend rate of 6.75 per cent and RM39.08 billion gross investment income for financial year ended 31 December 2014, an increase of 11.66 per cent compared with RM35.00 billion in 2013.

The 6.75 per cent dividend amounted to a total payout of RM36.66 billion where RM5.41 billion was required to pay every one per cent of dividend rate for 2014. This was 10.53 per cent higher compared with RM4.91 billion paid for every one per cent dividend rate for 2013, in tandem with the rise in contributors’ savings.

In a statement today, EPF Chairman Tan Sri Samsudin Osman said, “Despite uncertainties in both the domestic and global markets, our result in 2014 outperformed what we had achieved in 2013. It is worth mentioning that our global investments had contributed 33 per cent towards our total income for 2014 despite being only 23 per cent of our total assets.

“No doubt the end of 2014 had been challenging for the EPF due to the slump in the global oil prices. The weakening of the ringgit in the fourth quarter added further uncertainty. However, our prudent diversification approach had given us the edge and resilience to weather the economic conditions, particularly in the global markets.”

He said in order to correspond with the Fund’s objectives to preserve and add value to members’ savings, the EPF aims to provide at least a return of two (2) per cent above inflation over a three-year rolling period. The dividend declared for 2014 is equivalent to a rolling three-year real return of 4.11 per cent over inflation.

The latest dividend payout was derived after deducting the net impairment allowance on financial assets, unrealised losses due to foreign exchange rate and derivatives prices, investment expenses, operating expenditures, statutory charges as well as dividend on withdrawals.

The 2014 gross investment income was mainly driven by Equities in the domestic and global markets covering both emerging and developed countries. The asset class recorded an investment income of RM22.91 billion in 2014, up 17.37 per cent compared with RM19.52 billion in 2013, and contributed 58.63 per cent to the total gross investment income in 2014. Almost half of the income of the equity investment is derived from EPF’s global portfolios.

The majority of the EPF’s investment assets were placed in low risk fixed income instruments as this asset class provided a stable stream of income in the long run.

Loans and Bonds contributed RM7.57 billion in income, compared with RM7.51 billion in 2013. This rise was attributed to the performance of the global portfolios by both internal and external fund managers. Malaysian Government Securities and Equivalents recorded RM6.59 billion in income, registering a rise of 6.14 per cent, compared with 2013. Meanwhile, Money Market Instruments posted an income of RM619.65 million.

Real Estate and Infrastructure contributed RM1.39 billion in investment income in 2014. This inflation-linked asset class, which the EPF has started invested in since 2010, has over the years been showing encouraging performance and is a 22.31 per cent increase from 2013.

Tan Sri Samsudin said these asset classes were effective inflation hedging tools, befitting the Fund’s long-term objectives as a retirement fund, and the EPF would continue to explore opportunities in real estate, infrastructure and natural resources in accordance with its Strategic Asset Allocation (SAA).

“We foresee the challenges ahead given the rising levels of economic uncertainty in both domestic and global markets on the back of low oil prices, potential reduction in global GDP growth and further compression in fixed income yields. Recent quantitative easing in global markets and a more deflationary outlook will lower expected nominal yields for long-term investors like the EPF. However, we expect inflation to remain benign given our aggregate demand and lower energy costs. With this in mind, this year will see us continue upholding our policy of judicious risk management and investment allocations that targets a return that beats the rate of inflation.

“The bulk of our investments is in the domestic market and although the breadth of investment products and liquidity to trade in large volumes are somewhat limited, we remain optimistic due to our local market’s strong fundamentals. Based on this premise, we will continue to tap into opportunities in the local market that fit into our risk-return profile. The bottom line for the EPF remains the real returns for our members and therefore, we will continue to be prudent, diversified and disciplined in our approach to investing.”

As at 31 December 2014, the EPF’s total investment assets stood at RM636.53 billion, up 7.91 per cent from RM589.87 billion in 2013. The overseas exposure, which makes up 23 per cent of the Fund’s total investment assets, is part of the diversification programme to generate consistent returns in the long-term.

Tan Sri Samsudin added, “Syukur Alhamdulillah, I am proud to say that the achievements recorded last year as well as the numerous awards won by the EPF were attributed to the hard work and commitment of our team to continually deliver to our members.”

Members can view the 2014 dividend announcement via EPF’s Facebook page at “Kumpulan Wang Simpanan Pekerja”, Twitter at KWSPBuzz and on YouTube at KWSP Malaysia.

The EPF account statement for the crediting of the 2014 dividend is available online via i-Akaun at myEPF website (www.kwsp.gov.my). Alternatively, members can obtain their statement via EPF Kiosks or visit any EPF branches starting Sunday, 8 February 2015.

 

Source: kwsp.gov.my

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