Financial analysts anticipate that the Employees Provident Fund (EPF) will declare dividend rates for 2025 ranging between 5.8% and 6.3% for Conventional Savings and 5.5% to 6.0% for Shariah Savings.
Samirul Ariff Othman, Senior Consultant at Global Asia Consulting, said the projections reflect strong investment performance recorded during the first nine months of the year, though the final dividend will depend on EPF’s profit-realisation policies and long-term reserve obligations.
Speaking to Berita Harian, Samirul explained that the expected rates balance the robust nine-month performance with EPF’s governance framework, which prioritises fund sustainability over short-term maximisation of dividends.
“Based on the first nine months and the EPF’s disciplined approach to profit realisation and reserves, the 2025 dividend is expected to be around 5.8% to 6.3% for Conventional Savings and 5.5% to 6.0% for Shariah Savings,” he said.
He also highlighted that contributors should understand that not all market gains translate into distributable dividends, particularly unrealised gains that exist only on paper.
“The EPF does not distribute ‘mark-to-market’ gains, including those influenced by foreign exchange, unless they are fully realised,” Samirul added.
Despite positive global market trends, he emphasised that actual dividend rates depend on profits genuinely realised and the need to maintain sufficient reserves for long-term stability. “This inherently limits the dividend ceiling, even when investment income looks strong on paper,” he said.
The projected difference between Conventional and Shariah dividends stems from structural constraints in Islamic-compliant investments. “Shariah portfolios lack conventional bonds, have limited risk management options, and are more sensitive to equity cycles,” Samirul explained. These limitations typically result in slightly lower returns compared to Conventional Savings, which have access to a wider range of financial instruments.
The expected 2025 rates would continue EPF’s trend of relatively stable dividend performance. In 2024, both Conventional and Shariah Savings achieved matching rates of 6.3%, reflecting a convergence between the two account types.
Historical EPF data show fluctuating dividend rates depending on market conditions. In 2023, Conventional Savings returned 5.5%, while Shariah Savings delivered 5.4%. In 2022, rates were 5.35% and 4.75%, respectively. The strongest recent performance came in 2021, with Conventional Savings at 6.1% and Shariah Savings at 5.65%, while pandemic-affected markets in 2020 produced lower returns of 5.2% and 4.9%, respectively.
EPF’s cautious dividend approach reflects its dual mandate: offering competitive returns to contributors while safeguarding the long-term sustainability of Malaysia’s key retirement fund.
