EPF News: 10 things about EPF you may want to know about

EPF News: 10 things about EPF you may want to know about

Who is EPF?

KWSP or also known as Employees Provident Fund (EPF) will be in the news every time their next dividend is about to be announced. Is it higher than last year? Is it lower? Does EPF still have money for withdrawals? (this last question is a foolish one by the way… and I always correct people.) By the way, just during the COVID period, the members withdrew RM145 billion yeah.

Some may be for emergency but I personally know a few who’s not… they say they can invest the money better than EPF… whatever. Below are the 10 things about EPF which you may want to know. Happy reading!

#1 – What’s the dividend like for the last 10 years?

If you think it’s low, it’s your opinion. In my opinion, it’s pretty decent by any standard. Feel free to google for other provident funds in the world to understand why I say so.

#2 – All EPF members are guaranteed a minimum dividend every year!

Under Section 27 of the EPF Act 1991, the guaranteed minimum dividend rate is 2.5% per year on members’ savings.  Source: https://www.kwsp.gov.my/

#3 – 2023 dividends may be higher than 2022! That’s good news yeah.

#4 -How many EPF members and how many employers who are contributing to the EPF?

#5 – Do members get a different percentage in contribution from the employer?

yes. In fact there are employers who pay higher than the statutory percentage too.

#6 – Can members withdraw their savings at ANYTIME?

During the Covid-19 period, the government did allow withdrawals but the short answer to the question is NO… currently. Soon, there is one new account created for members to access their money and this is irrespective of whether the member is B40, M40 or T20 groups. It’s called at this moment, ‘flexible account.’ Info source: thestar.com.my

#7 – How’s EPF ranked versus peers in the world?

Based on Mercer CFA Institute Global Pension Index for 2022, EPF is ahead of pension systems in some developed nations, including China, Japan, South Korea and Taiwan. Scored 63.1 by the report, EPF ranked higher than most of its peers in Asean such as Indonesia (49.2), the Philippines (42) and Thailand (41.7), with the highest ranked in Singapore (74.1). Source: theedgemalaysia.com

#8 – When was the highest dividend in percentage, ever?

That was way back in 1980s. 1983 – 1987. Just need to remember also that during that time the interest for loan in 1983 was 11.8 percent. :) Image below the EPF one. So that you know that high dividend does not mean it was better then. Today the dividends are higher than the interest rate to buy a car or a house

#9 – How old is our EPF, you think?

Surprise! It’s now 72 years old! :) Yea, quite an amazing feat. To the leaders who had the foresight to set up EPF way back in 1951.

“The Employees Provident Fund (EPF) is one of the world’s oldest provident funds. Established in 1951, we help the Malaysian workforce to save for their retirement in accordance to the Employees Provident Fund Act 1991.” Source: www.kwsp.gov.my

Yes, EPF is the one of the oldest in the world yeah. Quite an amazing journey indeed.

#10 – What is the size of EPF versus the world of pension funds?

We are 15th largest in the world. This is quite an amazing feat because… in terms of population size, we are just 46th in the world. Briefly, we are punching way above our weight here.

There’s the top 10 things about our EPF which you may or may not be aware of. Please feel free to share with your friends too. Thank you.

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