PETALING JAYA: Despite the Covid-19 pandemic, the Employees Provident Fund (EPF) says it has delivered a solid performance in 2020 for both its operational and financial results with a total dividend payout of RM47.64bil.

The pension fund declared a dividend of 5.20% for Conventional Savings and 4.9% for Syariah Savings for 2020.

It said the payout amounted to RM42.88bil and RM4.76bil respectively for both savings.

Last year, EPF declared dividends of 5.45% for Conventional Savings 2019 and 5% for Syariah Savings 2019.

In the past 10 years, EPF’s dividend payout for Conventional Savings was at 5.8% in 2010 followed by 6% (2011), 6.15% (2012), 6.35% (2013), 6.75% (2014), 6.4% (2015), 5.7% (2016), 6.9% (2017), and 6.15% (2018).

For Syariah Savings, it recorded dividends of 6.4% in 2017 and 5.9% in 2018.

EPF said its investment assets hit RM1 trillion on Dec 3 last year, having recorded a compounded annual growth rate (CAGR) growth of 11.2% since 1985, achieving a year-on-year growth of 7.9% for 2020.

EPF added that it had been successful in posting a strong performance in 2020 despite the once-in-a-lifetime event stemming from the pandemic and the unique circumstances the world found itself in, with the twin health and economic crises.

EPF chairman Tan Sri Ahmad Badri Mohd Zahir said they managed to safeguard their members’ retirement savings well, while meeting their immediate needs to deal with the current challenges.

“It was not easy at times as we had to walk a tightrope in ensuring that our members survive the difficult times while balancing their future needs.

“The quick spread of Covid-19 and its transmissibility made it a ‘black swan’ event that many found challenging to manage.

“However, we were proactive in managing the pandemic and that helped us to ride through the challenges. Our focus on digitalisation enabled us to assist our members more efficiently and seamlessly while ensuring that we remain relevant to members who are more technology-savvy, ” he said in a statement yesterday.

Ahmad Badri added that EPF’s speed of adaptability in its investment strategy and processes ensured that they were able to deliver optimum performance, and they further leveraged on the strength of about 250-strong investment professionals who diligently managed the portfolios and took proactive measures.

“Solid teamwork and digital infrastructure ensured that we could adapt seamlessly to the new work norms, ” he said.

He also noted that EPF also rebalanced its investment portfolios based on thorough consideration on how the Covid-19 pandemic and global uncertainties, such as the US presidential election in November 2020, the continuous US-China trade dispute, and the impact of the Brexit negotiations, had influenced capital markets worldwide.

On EPF’s investment portfolio, Ahmad Badri said following lower net contributions during the year, EPF’s ability to adapt to the current times ensured its investments were able to deliver long-term sustainable returns under the new normal, adding that the fund recorded its highest ever gross investment income of RM60.98bil, with RM6.15bil allocated to Syariah Savings.

“The strong performance was due to the prudent approach guided by the fund’s overall Strategic Asset Allocation (SAA), which has kept the EPF resilient despite the unanticipated crisis.

“By asset class, fixed income instruments made up 46% of investments, while equities comprised 42%. Real estate and infrastructure as well as money market instruments made up 5% and 7% respectively, ” he said.

Ahmad Badri added that EPF was a long-term investor and remained steadfast with its diversification programme across asset classes, strategies, managers, markets, countries and currencies.

“The contribution from the overseas assets was also critical to our performance, ” he said.

As of December 2020, he said overall the EPF had 33% of its investment assets outside of Malaysia across all asset classes. Equities, particularly foreign equities, continued to be the driver of returns with a total income of RM28.71bil. The private equity portfolio also demonstrated strong performance with a consistent income distribution.

“While leading stock indices lost as much as 40% in the first quarter, the EPF took the opportunity to rebalance its portfolio by acquiring shares that were fundamentally strong at attractive prices.

“The recovery in the second half of the year on the back of improved global and domestic markets also contributed significantly to the EPF’s investment portfolios, providing for profit-taking opportunities, particularly in the fourth quarter, ” he said.

He noted that EPF, too, took prudent measures to write down RM7.71bil of its listed equity portfolio, to ensure that the fund’s long-term investment portfolios remained healthy.

With the i-Lestari and i-Sinar withdrawal facilities, Ahmad Badri said its money market portfolio grew significantly to cater for all the withdrawals, adding that the income from the money market portfolio came in at RM1.19bil.

To date, EPF noted that a total of RM18.1bil has been withdrawn by 5.16 million of its members under the i-Lestari facility.

Ahmad Badri said with almost half of the fund’s total asset allocation in fixed income instruments, comprising Malaysian government securities and equivalent, and loans and bonds, EPF was able to maintain stable returns and at the same time captured opportunities to realise profit as interest rates declined.

“Income from the portfolio came in at RM25.42bil, or 42% of the fund’s total gross income. The real estate and infrastructure portfolio’s income of RM5.66bil came with its own set of challenges, with lockdown measures and work-from-home resulting in lower income from certain segments of the real estate sector.

“However, the portfolio overall continued to play a role as a hedge against inflation with a spread of about 50 basis points above fixed income instruments, ” he said.

The EPF’s overall investment assets grew 7.9% to RM998bil, with the market value hitting RM1.02 trillion at the end of last year.

The fund’s membership base also grew by 2% to 14.89 million, while employers registered with the EPF stood at 534,398.

“It takes RM8.25bil to pay out every 1% dividend for Conventional Savings and RM972mil for every 1% dividend for Syariah Savings in 2020, ” he said.

FOR those of you who follow my column regularly, you may find this headline rather contradictory to my usual topics. You might be asking yourself “shouldn’t I be planning my finances today to avoid working during my retirement years?”

You are absolutely right.

Before we go further, I’d like to clarify that the topic of “working during retirement” that will be discussed here is not for the purpose of generating income.

It is never a good idea to rely on the possibility of working in your retirement years as a primary source of income, as there is no way of knowing your state of mind and health in those years, and whether you will possess the energy and enthusiasm to continue performing at work.


It is therefore always a primary goal in financial management to plan to achieve financial freedom (the ability to continue your lifestyle without relying on active income) by the time you hit retirement at 60 years of age. By this time, working should be a choice, not a need - more on this below.

Yap Ming Hui (pic): There are few true replacements for the type of daily interaction that one gets from colleagues. After retirement, it can be difficult to find an avenue to meet new people and expand your social circle.
Yap Ming Hui (pic): There are few true replacements for the type of daily interaction that one gets from colleagues. After retirement, it can be difficult to find an avenue to meet new people and expand your social circle.

Why work?


Living your retirement years while being financially free is a great achievement. You’ve worked hard your entire life trying to support yourself and your family, you definitely deserve a break.

But life doesn’t stop there. While you no longer have to work for your living expenses, many find themselves at a loss of what to do after enjoying the initial few years of their retirement break.

Furthermore, with the advancement of healthcare, people are now expected to live longer. So when you hit retirement at age 60, you’ll likely be around for another 20-30 more years if you’re in good shape. What will you do with your time?

It is not unusual, therefore, to consider going back to work in these circumstances. In fact, studies show that there are several common factors that tend to pressure retirees to head back into the workforce, such as:

>Excessive boredom, which occurs when you have no concrete plans and goals for your retirement life.

>Needing space from your family after spending almost every day and night at home with them

>Running out of topics for conversations with your friends

>Missing the thrill and rhythm of working life

While these may be some of the factors that drive someone into working during a time when he or she should be slowing down, let’s not forget that working life also has its attractive offerings, such as:

>Constant source of socialisation. There are few true replacements for the type of daily interaction that one gets from colleagues. After retirement, it can be difficult to find an avenue to meet new people and expand your social circle.

>A purposeful life. Work helps some people find a sense of purpose and meaning to their life. Without this purpose to fuel you, you may find it difficult to live happily.

>Keeping an active mind, which in turn benefits long-term health. Studies have shown that people who remain inactive in their retirement years tend to age significantly faster and die sooner.

>A distraction from boredom. Not everyone has a plan or a hobby to fallback to during their retirement years. For those who have relied on work to give them motivation and structure, life in retirement can seem like a bore.

What types of work should I take on?

Working in retirement can be a very different experience from working during your prime years. The primary difference is that this time, you do not have to restrict yourself to a certain type of work because of economic factors.

You can now try out other areas of work that you may have been curious to explore, but were not in a position to try because of economic factors. And if it doesn’t meet your expectations, you can always switch to something else easily.

Some of work options that people take on during retirement are:

>Extension of your current career - This is one of the more popular options for retirees. After spending your life building up your career or experience, this may seem like a more natural way of continuing to work while in retirement. Only this time, you will be able to shape your work into an arrangement that suits your level of comfort. For example, if you were working in a corporate job, you may be able to adjust your hours into a part-time work arrangement, or even pivot into a consultant depending on the experience that you’ve accumulated. If you were running a business, you could look to reduce hours and set less stressful goals for you to achieve.

>Exploring a new line of work - If you are tired of the line of work that you used to be in, this is an excellent time to explore something new. For example, if you were previously working an executive job in a corporate environment, you may find it refreshing to roll up your sleeves and try something with your hands instead, like a working with food or woodwork.

>Starting your own business - This is also a time you can consider venturing into your own business. Setting up your own business can be a rewarding and empowering experience, as it gives you a sense of control to visualise some of your dreams. However, this has its own risks, as it will consume some of your savings you have set aside for your retirement.

>Volunteer work - Volunteering in a non-profit or a charity is also a great option for those looking for something with less commitment of a career or business, while being a rewarding experience. Volunteering can give you a sense of purpose and legacy as you’ll be contributing to helping people who are in dire need of it.

Whichever work you choose to take, make sure to ask yourself these questions to ensure that you embark on a path that is suitable for you:

>What tasks do I enjoy doing?

>What type of impact do I want to make in my work

>What kind of stress levels am I willing to tolerate?

>What past skills and experience can I harness for my work?

>How many hours am I willing to commit to work?

>What kind of financial commitments would I have to fork out for this work?

Working should be a choice, not a need

Lastly, before making the choice to pursue any of the above options in your retirement years, make sure you have examined the impact of working onto your bank account balance, and budget out the necessary expenses, taxes, and other costs that will be involved.

It is important that you see this opportunity to work in retirement as an option, and not a must.

To ensure that this is the case, make sure that you have drawn out a proper retirement plan at least 20 years before you plan to retire. The longer time you have left, the more you can prepare and accumulate before your retirement.

The Employees Provident Fund (EPF) has suggested that the minimum savings you should accumulate in your account by age 55 is RM228,000. However, according to their numbers, only 18% of contributors managed to accumulate that amount or more. On top of that, 70% of those who withdraw their funds at 55 often use up their EPF savings in less than 10 years.

To enjoy a comfortable retirement, do regular pulse checks every year to ensure you are on track to your retirement goals. Just like how you would do a routine physical check-up to get a picture of your overall health, the same should be practiced for your financial health.

There are two ways I recommend you do this:

Option 1 - Download the free iWealth app which will guide you through a self-evaluation to see if you have adequate assets to sustain you during retirement, or

Option 2 - Consult a licensed independent financial advisor.

If you are not too familiar with financial jargon or do not have the time to do a detailed self evaluation, consult the expertise of an unbiased, independent financial advisor to evaluate your retirement goals and give you peace of mind for your well-deserved golden years that’s to come.

Yap Ming Hui is a licensed financial planner. The views expressed here are the writer’s own. Any reliance you place on the information shared is therefore strictly at your own risk.

ONE way to boost your retirement savings is by topping up RM60,000 a year into your Employees Provident Fund (EPF) savings.

This is on top of the monthly statutory requirement. The RM60,000 top-up is a voluntary contribution. It can be done any time in a year. Just imagine what the amount would be, say, in five, 10 or even 20 years besides the dividends and the compounding interest.

Recently, someone opted for a voluntary separation scheme (VSS) after having worked for 30 years. He got a handsome lump-sum payout which he did not expect.


However, he had also been diligently topping up his EPF savings yearly, and in 10 years, it had totalled RM600,000, excluding dividends, compounding interest and inflation.

Combined with the statutory monthly deductions of over 30 years, dividends and compounding interest, his total savings had swelled to over RM2mil at the point he left the company.


It is not a lot of money to some people, but a treasure to others. “I wanted to have RM10,000 as monthly spending money so I topped up my EPF savings every year instead of putting the money into other instruments. RM2mil is a base for me and I intend to withdraw just the dividends as that is decent for now, ’’ Kong (not his real name) said.

Going by last year’s dividend payout of 5.20%, his rough monthly withdrawals should work out to RM8,600, or 86% of RM10,000 that he needs monthly.

Why he opted to top up his EPF savings rather than invest in other instruments is because he is not a risk taker. Based on the past five years of EPF dividend distribution track record, the average annual EPF dividend payout is 5.88% per annum, said Woo Chui Chui, head of investors and affluent, group retail banking at RHB Bank Bhd.

He added that the EPF by law is required to pay yearly dividends of at least 2.5% to its contributors. For now, property rental returns only offer about 3%-4%.

The annual dividend payout by the EPF is based on your savings as at Jan 1 yearly. Your dividends are calculated based on your daily aggregate balance, as per the EPF website.

When you retire, you are really on your own. Whatever you have saved over the years is your war chest which often determines the life you will lead. Bear in mind that the cost of medical care is rising and so is life expectancy, which is forecast at 75 to 82 years.

Therefore, financial planning for retirement should be done early and saving for retirement does not also mean you have to live a frugal life and give up on many things. It is just about planning to maximise on returns.

Some of those in the public sector are less worried about retirement as they have the pension scheme to take them through their golden years. Rare are companies in the private sector that offer such schemes here, so EPF savings are seen as way to accumulate some wealth for retirement.

Many people also have overlooked the main reason for their EPF savings. Some use it as an educational fund for their children and others to purchase property.

That is not wrong if you are stuck for cash, but try your best not to hijack your EPF savings as that is really meant for your retirement. “One should not over-rely on the EPF for other purposes although withdrawal is allowed, as these savings should be kept for retirement, ’’ said Woo.

Woo added that the EPF is relatively a stable vehicle to keep your money for the long term. As with just any savings fund, the benefit of putting your money in the EPF is the dividends and the compounding interest that you could accumulate over the years.

“Hence, the decision to withdraw from the EPF must be justifiable and be used as a very last resort, ’’ he added.

In a regime of low interest rates, the dividend from the EPF appears attractive. It is a statutory requirement for an employee and employer to contribute towards EPF savings and the rate is 11% and 12%/13% respectively of your monthly salary.

However, during this Covid-19 era, the percentages have been revised downwards, but the option is there to retain the same equation as the pre-Covid era.

The EPF in queries to StarBiz said members and/or employers can choose to contribute more than the statutory amount, which together with the compounding effect of dividends, would help to increase the size of members’ funds faster.

Some companies do raise the percentages for both, for various reasons, up to 30%. At 30%, it is 6%-7% more than the statutory requirement.

The top-up of RM60,000 a year is a voluntary contribution by you. It does not have to be a lump-sum deposit. You can also save the same amount for your spouse and children.

“There is no limit on the number of children that a member can top up for, ’’ said the EPF. At 60, you can make a lump-sum withdrawal, or opt to “withdraw savings accumulated from Akaun Emas partially, such as on a monthly basis, annual dividend only or any amount of savings at any time”.

“With this flexibility, members are better able to plan and manage their retirement savings while continuing to enjoy the compounding effect of annual dividends, thus ensuring that their funds last longer, ’’ the EPF said.

The EPF said withdrawals are not subjected to any fee. You can also leave your money in the EPF up to the age of 100 and the same “rate of dividends will be paid to all members based on the dividend rate declared for conventional or syariah savings”.

Of course, the decision is yours to keep your money in the EPF or take it out to invest in other instruments for higher returns. That choice is yours and so are the risks.