Frequently Asked Question

Find out the answers on EPF Dividend 2019.

• What is the Dividend 2019 rate for Simpanan Konvensional (SK) and Simpanan Shariah (SS)

  Dividend 2019 rate for Simpanan Konvensional (SK) is 5.45% and 5.00% for Simpanan Shariah (SS).

• What is the total payout for dividend 2019

  Total dividend payout for 2019 was RM45.82 billion, where RM41.68 billion was for SK and RM4.14 billion for SS.  
  The payout amount required for every 1% dividend rate for the year is RM7.65 billion for SK and RM828 million for SS.

• How does the EPF pay dividends to its members

  The EPF declares its annual dividend payout based on its net realised income. EPF’s dividend payouts are derived from total gross realised income for the year, after deducting the net impairment on financial assets, realized losses on listed equity, undistributable unrealised gains or losses, investment expenses, operating expenditures, statutory charges as well as dividend on withdrawals.  

• Why is there a difference between the dividends declared for SK and SS

  The dividends declared for both SS and SK are reflective of the actual performance of the investment assets respectively. 
  While both SS and SK get their respective portion of the Shariah income, SK also benefited from the income generated by non-Shariah assets. 

• How does EPF’s dividend compare with other funds

  The comparison of dividend rates between the EPF’s and that of other funds is not based on “apple-to-apple” comparison as the objectives, strategies and investment risks of each funds are different.The EPF is a retirement savings fund responsible to ensure members’ retirement well-being.  Therefore, EPF’s strategies must be prudent with greater emphasis on preserving capital and provide long term stable returns supported by comprehensive investment risk management.

• Which income profits are constituted as non-Shariah

  This refers to all profits/returns from non-Shariah investments due to their non-Shariah compliant nature of being interest-based investments (usury) such as conventional banking stocks, conventional loans and bonds. 
  
  Other income from investments that do not comply with the Shariah screening criteria as adopted by the Shariah Advisory Council of Securities Commission Malaysia and relevant Shariah index providers, includes equities and properties which generate their income from non-Shariah compliant income and rental ratio and financial ratio (conventional debt and cash).

• Are members allowed to switch back to SK

  Members may revoke their registration for SS before the effective date.  Revocation after the effective date is not allowed in order to avoid speculative investment to gain short-term returns. 
  
  SS was introduced for EPF members who choose to have their retirement savings invested in accordance with the Shariah principles that provide dividends from sources that are Shariah-compliant.
  
  Those who prefer not to restrict their EPF savings from earning dividends from both Shariah-compliant and non-compliant investment assets may want to remain with SK.

• Why should we switch to SS if EPF cannot guarantee its minimum returns like SK

  SS is an option for members who want their retirement savings to be managed and invested in accordance with Shariah principles, of which the return on investment is based on its actual performance.
  
  SS option allows muslim members to benefit from the dividend derived from Shariah-compliant investment as opposed to SK dividend that is tainted and required to be purified as it is derived from sources which are not Shariah-compliant such as interest (riba) based investments that are prevalent in conventional banking stocks, conventional loans and bonds. 
   

  The 87th Muzakarah (Conference) of the Fatwa Committee National Council of Islamic Religious Affairs Malaysia held on June 23-25, 2009 resolved that:
  
  In Islam, property acquired by mean that is not Shariah-compliant, such as usury, ambiguous transaction, gambling, fraud, robbery, plunder, corruption, etc is illegal and cannot be used for personal gain and benefit and must be purified.
  Any guarantee of return by EPF may tantamount to interest (usury) that is prohibited by Shariah principles.  However, both SS and SK share similar investment strategic targets to ensure capital preservation and value enhancement of members’ savings. 
  The decision to switch to SS lies solely with members.

• I am a Muslim and have not opted to switch to SS. What is the percentage of SK dividend for 2019 that is to be purified

  The SK dividend derived from Shariah non-compliant investments cannot be used for personal gain and benefit of Muslim members and should be cleansed as resolved in the 87th Muzakarah (Conference) of the Fatwa Committee National Council of Islamic Religious Affairs Malaysia held on June 23-25, 2009 as follows: 

  In Islam, property acquired by mean that is not Shariah-compliant, such as usury, ambiguous transaction, gambling, fraud, robbery, plunder, corruption, etc is illegal and cannot be used for personal gain and benefit and must be cleansed through the following methods:

  1. channeled to Baitulmal for the general public interest of Muslims such as for funding the construction or maintenance of bridges, roads, toilets, etc; or
  2. given to the poor.

  SK dividend’s purification rate for 2019 is 71% of the amount of dividends credited to member’s account.

• What is the EPF’s Strategic Asset Allocation

  The EPF is guided by its Strategic Asset Allocation in its investment activities to increase return within its risk tolerance limit. 

  A total of 36% is allocated in equities that provide potential capital appreciation and dividend income, and 10% is allocated in alternative investments, including real estate, infrastructure and private equity which helps to protect against inflation.  The remaining 3% is allocated in Money Market instruments for liquidity management. 

• Does the EPF take on excessive risks in its investments

  The EPF has in place an investment risk management framework, which falls under the purview of the Investment Panel, comprising senior members of EPF management, Bank Negara Malaysia, industry professionals and the Government.
  The Investment Panel is responsible for matters pertaining to EPF’s investments and acknowledges responsibility for the investment risk management framework, which encompasses the organisation’s governance structure, risk appetite, asset allocation, policies and processes; which are reviewed regularly to ensure relevance and effectiveness. 
  
  When deliberating any investment decisions, the EPF follows a stringent due diligence process that requires it to first go through the Management Investment Committee, where proposals are scrutinised in accordance with our long-term diversification strategy and risk-return profile. Final approval is obtained from the Investment Panel.

• Can members, regardless of age, withdraw dividend from their EPF savings

  No, there is no provision under the EPF Act 1991 that allows for dividend withdrawal regardless of age.  Withdrawal of dividends is only applicable to eligible members above Age 55. For information on other types of withdrawal, please refer to www.kwsp.gov.my.

• How can I check if the dividend has been credited into my EPF account

  Members may check their Member Statement through i-Akaun mobile app, EPF kiosks or any EPF counters nationwide, starting from Saturday, 22 February 2020. The i-Akaun mobile app is available for download from Google Play Store or Apple App Store.