Tunku Alizakri: EPF Members Should Have A Say On Tiered Dividends

alizakri alias epf

alizakri alias epf

Employees Provident Fund (EPF) members should have a say if dividends are changed to a tiered structure, said Tunku Alizakri Alias. The now-former CEO of EPF made this statement in response to a question of whether the EPF is considering tiered dividends to give members with lower savings an added advantage.

“Tiered dividend is a very complex structure, it has both its pros as well as its disadvantages. We [the EPF] have always operated from an ‘everybody gets the same dividend’ base philosophy,” said Tunku Alizakri during the virtual media conference at the announcement of the EPF’s 2020 dividend.

Tunku Alizakri continued, “Tiered dividend would actually suggest that there will be ways for us to go and deliver our dividends to our members in very different ways in the future, so again, this is a very complex issue and this is something that the EPF will have to go and touch base with our members at the end of the day because our members need to have a say in how the dividends that they will be receiving in the future should be structured.”

(Image: Astro Awani)

Here’s an example of how tiered dividends would work in practice – every EPF member would receive a higher dividend rate for the first RM50,000 of their savings, but get progressively lower rates for the next RM50,000 or RM100,000. Therefore, tiered dividends would pay a higher effective dividend rate to those with lower total savings overall, as those with savings above a certain predetermined threshold would get a lower rate for that amount.

Regardless of any possible changes to the dividend structure of the EPF in the future, Tunku Alizakri reassured members that the EPF would remain the best option when it comes to retirement funds. “I would like to think that you will also get the best returns for the type of fund you will be putting your retirement fund in, so rest assured EPF is still the place for your retirement future,” he said, adding that EPF savings would always be managed in the “best way possible by the best investment team possible.”

For the year 2020, the EPF declared a 5.2% dividend for its Simpanan Konvensional and 4.9% for Simpanan Shariah – better rates than expected given the challenging economic climate of Covid-19.

(Source: The Edge Markets)

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Yen
1 month ago

I don’t think it should give dividend based on tiers. Is also not fair to those people that contribute hard earned money, not that higher salary based need to give less dividend, its defeated the purpose of all members wanted to save for retirement. Then the people that stucked in the middle range always got sacrificed, because salary not low enough to get government subsidy, not high enough to have a comfortable life and still struggling in between. Why people have to sacrifice for their earning for people with lower income? Isn’t they already get all kind of helps from.… Read more »

Aniki
1 month ago

Those who contribute more get lesser while contribute less get higher? Those who suggest this must be ppl waiting for money drop from the sky… i would prefer the other way round, contribute more get higher dividend to push ppl to save more inside epf, of cos depends on the ppl manage our epf is having a business mind or not

Jayaram Krishna
1 month ago

EPF is for retirement…compare this with Govt pension. That is also for retirement. You cannot say have tiered pension rates for govt servants…the argument is still the same. Why should govt servants thru all salary grades have the same formula for calculating graduity and pension?
Note that both private and govt employees need to maintain a certain lifestyle. I depend on my EPF.

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