A Decent Return of 5.65% EPF Dividend for 2009

EPF announced today the dividend rate of 5.65% was declared for financial year ended 31 Dec 2009. It was declared on the back of the highest ever net income achieved of RM19.63 billion. The dividend rate is better than expectations for many EPF account holders and it is in fact an impressive return. I have initially anticipated to have the maximum of 5.25% - 5.5% for 2009 considering that the country had just recovered from the recession in Q4 2009, resulting from the global financial crisis. This is the second best dividend rate declared in the last 10 years, slightly behind the highest 5.8% in 2007.

Based on EPF website, as at 31 December 2009, EPF’s investment portfolio grew 8.55 per cent or RM29.25 billion to RM371.26 billion compared to RM342.01 billion in 2008.

There is an interesting note pointed out as well. For the 2009 dividend payout, the EPF requires RM3.43 billion to pay a one per cent dividend rate as a result of a larger membership base. This represents a 7.86 per cent increase over the amount of RM3.18 billion per one per cent dividend rate for 2008. This reflects the great challenge faced by the national pension organization in sustaining the decent dividend payout with the increase of contributors and the respective contributions.

In view of the challenging market condition and also unlikely to sustain the same performance of the EPF unit trust investment in 2010, I have decided to lock in some of the profit from the unit trust investment which I had commenced 6 years ago. The fund from the repruchase request is returned to the EPF account 1. Let's hope EPF can sustain the same performance for 2010 and beyond.