KUALA LUMPUR: The Employees Provident Fund (EPF), quashing speculation that it would pay 5.85% in dividends this year, has said that it would announce the rate next week.
EPF public relations general manager Nik Affendi Jaafar rejected a news report saying the rate would increase by 0.2% from last year’s figure.
“That information did not come from us and it is incorrect,” he told FMT.
“The real rate should be released at the end of next week.”
The Malaysian Insider, quoting an unnamed source, reported yesterday that the EPF board decided on the 5.85% figure at a meeting last month.
Economist Ramon Navaratnam told FMT he doubted that the increase would be so low considering the healthy performance of the equity market last year.
“Giving subscribers low dividends is not going to be encouraging,” he said. “EPF could be giving more.”
An opposition member of parliament agreed that 5.85% would be “a bit on the low side.”
“Going by last year’s equity market boom, a 0.2% increase is a bit on the low side,” said PAS’s Dzulkefly Ahmad, the MP for Kuala Selangor. “It doesn’t reflect the boom year.”
But DAP’s Tony Pua said “5.85% is a respectable return from the fund” although he expressed worries that EPF was becoming less of a fund manager and more of a conglomerate.
“The real concern is with EPF undertaking greater risks with direct ownership and control of projects and companies,” he said, adding that it was turning into “a fund of last resort for the government to achieve political ends.”
Dzulkelfy echoed this sentiment, saying executive bodies “should not cannibalize EPF funds”.
“My concerns are more related to EPF’s fiduciary responsibility to its contributors, which is why EPF should invest in a more judicious manner rather than funding government bailouts,” he said.
