The Employees Provident Fund (EPF) is expected to announce dividend rates of between 5.8% and 6.3% for Conventional Savings and 5.5% to 6.0% for Shariah Savings for 2025, according to financial analysts. The projections are based on the fund’s strong investment performance during the first nine months of the year.
Senior Consultant at Global Asia Consulting, Samirul Ariff Othman, said the forecast reflects solid investment income, although the final dividend rates will depend on EPF’s profit realisation policies and its commitment to maintaining sufficient long-term reserves.
Speaking to Berita Harian, he explained that EPF’s governance framework prioritises long-term sustainability rather than maximising short-term dividend payouts. As a result, not all market gains are translated directly into dividends for contributors.
Samirul highlighted that unrealised gains, including mark-to-market gains and those arising from foreign exchange movements, cannot be distributed as dividends. Even when investment income appears high on paper, only realised profits are eligible for distribution.
He added that while global market conditions have improved, dividend levels remain constrained by the need to preserve adequate reserves to ensure the fund’s future stability. This effectively places a ceiling on dividend payouts.
Addressing the difference between Conventional and Shariah Savings rates, Samirul noted that Shariah portfolios typically generate slightly lower returns due to structural limitations. These include the absence of conventional bonds and fewer risk management instruments, making Shariah investments more sensitive to equity market cycles.
Despite these differences, the projected 2025 dividend rates would maintain EPF’s relatively stable performance in recent years. In 2024, both Conventional and Shariah Savings recorded matching dividend rates of 6.30%.
Historical data shows that EPF dividend rates have fluctuated over time in line with market conditions. In 2023, Conventional Savings delivered 5.50%, while Shariah Savings returned 5.40%. In 2022, the rates stood at 5.35% and 4.75%, respectively.
The strongest recent performance was recorded in 2021, when dividends reached 6.10% for Conventional Savings and 5.65% for Shariah Savings. In contrast, market disruptions during the pandemic in 2020 resulted in lower returns of 5.20% for Conventional and 4.90% for Shariah Savings.
EPF’s cautious approach to dividend distribution reflects its dual responsibility of providing competitive returns to contributors while ensuring the long-term financial sustainability of Malaysia’s primary retirement savings fund.