THE Employees Provident Fund (EPF) is expected to announce a higher dividend rate for 2025, following a robust investment performance in the first half of the year, driven by gains in global equity markets, according to economists.
In a statement on Friday, the EPF reported that its total investment income rose three per cent year-on-year to RM38.92 billion for the first half of 2025, compared with RM37.90 billion in the same period last year. For the second quarter alone, investment income surged by 22 per cent to RM20.61 billion, up from RM16.91 billion in Q2 2024.
Equities remained the main contributor to returns in the second quarter, delivering RM13.77 billion—an increase of 35 per cent compared with RM10.23 billion in the corresponding quarter of the previous year.
Associate Professor Dr Ahmed Razman Abdul Latiff of Putra Business School noted that while a higher dividend is possible based on the fund’s current trajectory, the percentage increase may not be significant.
“This is due to the higher number of new contributors and increased voluntary contributions, which require a larger allocation simply to maintain the same dividend rate—let alone raise it,” he told Bernama.
Dr Ahmed added that the growing number of contributors and voluntary savers reflects rising awareness among workers about retirement preparedness, which in turn increases the dividend pool requirement.
As of June 2025, the EPF recorded 286,194 new members, bringing total membership to 16.4 million. Employer registrations climbed to 37,402, raising the number of active employers to 619,662. Meanwhile, voluntary contributions jumped 55 per cent year-on-year to RM11.68 billion in H1 2025, compared with RM7.55 billion during the same period in 2024.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the EPF’s performance in the first half of 2025 was buoyed by global equity markets, and he expects this momentum to continue into the third quarter.
“So far, we’ve seen global equity markets continue to register reasonable gains, which are projected to contribute positively to Q3 performance,” he said.
However, he cautioned that market sentiment remains vulnerable to geopolitical risks and economic uncertainty, particularly stemming from tariffs imposed by the United States.
“In addition, global interest rates are trending downward, signalling a broader economic slowdown, which may indirectly affect EPF’s investment returns,” he said.
Despite these headwinds, Dr Mohd Afzanizam emphasised that the EPF’s ability to maintain its dividend level amid market uncertainty should be commended.
“The EPF’s vast experience in navigating challenges, combined with its strategic asset allocation, should help it achieve satisfactory returns for the whole of 2025,” he added.
In 2024, the EPF declared a dividend rate of 6.30 per cent for both conventional and Shariah savings, distributing RM63.05 billion and RM10.19 billion respectively. The 6.30 per cent rate was the highest since 2017. - August 15, 2025
