MALAYSIA’S EPF DISTRIBUTES 6.75% DIVIDEND WHILE CPF ONLY GIVES 4% INTEREST

The Malaysian Employees Provident Fund (EPF) will declare a dividend of 6.75% for last year to its 14 million members, sources said.

The payment was the highest since 1999, when the dividend was 6.84%, the source said.

“EPF chief executive officer Datuk Shahril Ridza Ridzuan will make the official announcement tomorrow,” the source told The Malaysian Insider.

The source said the EPF board met with stakeholders, including representatives of the government and employers, to convey its decision about the payout.

The Edge Financial Daily reported yesterday that the pension fund expected to sustain its high payout ratio by declaring a higher dividend payout for 2014 compared with 6.35% for 2013 and 6.15% for 2012.

The dividend rate of 6.35% for 2013 was declared on the back of a record gross investment income of RM35 billion, a 12.8% rise from RM31.02 billion in 2012.

On the other hand, even though Temasek Holdings claims to have made an average of 16% profits per annum since its inception, CPF, Singapore’s equivalent of the Malaysian EPF has stuck to its 3.5% to 4% interest rates for Singaporeans.

Why is a wealthy nation like Singapore unable to even match the dividends offered by our neighbours Malaysia? Should the CPF switch to a system where dividends are pegged closer to the profits made by our SWF GIC and Temasek Holdings?

What do Singaporeans think?

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