[quote=prophetjul,Feb 20 2019, 10:47 AM]
eg
First year declare 10%, then 2nd year 3%, a lot of people will complain on second year, all sort of bad mouthing, speculation may come out.
While if declare 6.5% consistently for 2 years, then people likely will be satisfied and perception may be difference from earlier example.

So, the board need/always have to view form long term perspective especially this is a pension fund, not ordinary unit trust.

Also, EQ risk may not as high as many perceive if invested into some stable high dividend stocks.
And many high dividend stocks are indeed generate very good return for EPF over the long term, as well as for individual investors.

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So you are saying that the EPF does not pay out all their earnings.

What then is the regulation which governs their payout? What gives them the right to make those decisions on how much to pay the shareholders?

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I would like to know the answer to this question as well. Where are the excess or undeclared dividends (whatever you call it)?

Anyone here invest in UT using their EPF. With the EPF dividend record ranging from 4.5% - 6% in recent years, I feel that is quite a decent return for basically zero risk.

Anyone that invested in UT using EPF funds can explain further their reasoning? I know long term UT can generate better return but risk against no risk.

Yes he is right. I cannot see people will put back the money they withdrawed from account 1, plus the compounding effect means even if you put back a bigger amount a few years down the road, the compounding effect has reduced drastically. Did a simple calculation on compounding calculator, your 10k maintained in EPF with constant 5% dividend will become 25k in 20 years time. With a lot of the people having less than the required savings for retirement, this 25k could really make up a sizeable portion in their retirement fund. Plus a 10k withdrawal allowed in one off or over a period of time is gonna do damage to the country in 20-50 years to come when the current working generation retire. They will have lesser retirement funds meaning government will have to spend more to help these people, and this in turn will burden the working group during that time. It will be a move that will affect the next 20-50 years.

Meanwhile, I believe there are genuine cases where people are really facing hardship putting food on table. It'll be a tough job for government to do a balance act on this. More scrutiny in allowing those that only need the withdrawal to survive will take time and this mean assistance not channeled in timely manner. Looser conditions will mean more people going to abuse it.

a lot probably got 'brainwashed' by the thinking I spend now I enjoy now, when the problem come in later years it will be solved by then. But I guess the best way how this can be done is to channel the EPF withdrawal direct to banks to pay for car loans house loans etc and should be a cash withdrawal (transfer to epf account holder's bank account). This is the only way to prevent abuse it for lifestyle expenses.

While it may not help the ones need money to put food on table, but i think this is the direction in the implementation in allowing withdrawal of EPF as it touches on retirement fund.

For immediate effect, I think this will impact on the dividend for this year as some investments might be pulled out to fund this withdrawal. Even if it is only B40 members it still makes up a very big amount if 10k is allowed per member.

For medium term (before vaccine is administered to the mass population), I think EPF will holdback on investment and maybe make short term investments only in case CMCO again then another withdrawal allowed again as the floodgate has been opened, although unlikely.

This is wrong in the first place.

Firstly, KWSP is a retirement fund, it is never meant to be withdrawn. Don't take other countries as example, it doesn't change the fact that KWSP is still a retirement fund. This move (i-sinar) to allow members to withdraw from account 1 is purely due to political pressure of the fear of budget getting rejected in Parliament as this is one of UMNO's demand. And this has also become a cheap publicity move by Najib as he has been on the social media constantly asking govt to allow EPF withdrawal of 10k one off. If govt allow, he gets the credit. If govt don't allow, he get popularity as someone who speaks for the people.

Secondly, a lot of these people who said "you don't need it, just don't withdraw, not take your money also", "your balance inside got reduce?". I view these people as financial illiterate. Like some of the comments above mentioned, as the KWSP pool of funds are reduced for investment, or worse still I believe this is the case they have to pull out some investments that were maybe targeted for longer term, this will definitely affect every KWSP members, as this will erode the returns on their retirement funds. No affect? My ass.

Thirdly, this is a mistake that cannot be reversed or unwind. People who withdraws for the purpose of funding lifestyle expenses (even if they are out of job doesn't mean they can think properly in financial terms), by the time they realize it at the age of say 40+ or 50, they won't have any chance of regretting or doing anything. You can't single handedly restore 20-30 years of compounded return by doubling your contribution (that is if you have the ability to). Everyone is thinking, oh 20 years later I most likely will be promoted to senior positions and getting a handsome pay, retirement should not be a problem. But i dare say, your colleagues sitting next to you, or the other side of the table, or the far end of the corner is thinking the same. How many senior positions are there? 100 people thinking the same thing but maybe only 5 senior positions is available.

While it is a good thing if it really helps the needy, the ones that are choosing between paying electricity bills or putting food on the table, I think it is only fair for KWSP to penalize those withdraw it from account 1 to have 50% reduced dividend until they have reimbursed the amount that they have withdrawn. This seems cruel but it is more fair for those who choose to ride it out due to their own prudent financial management with savings for rainy days, and this will also encourage those that withdraw to repay their withdrawals as soon as possible.

1. nothing wrong with people using their own money for survival/fun later but KWSP is set up for one reason and that is for retirement. While I am unable to comment on survival, fun should be funded by own savings/money outside of KWSP. If KWSP can be freely withdrawn for whatever purpose deemed suitable by the member himself/herself, KWSP will be doing the function of a bank or financial institution. Again, if it is about putting food on table and KWSP is the last avenue, yes, I have no qualms about withdrawing it otherwise people will be dead before they are able to reach the retirement stage.

2. Yes whether or not meaning it could be a yes and no. It has the potential to impact and also potential not to impact. But then why members who does not withdraw have to be exposed to this possibility?

3. Agree

4. While I agree it is an assumption, but it is a reasonable assumption. How many can manage their own money and in this sense I am comparing it against a very safe and decent return of 5-6% every year from KWSP? While you've done well if you've been consistently beating the EPF's return every year, still in my opinion people like you probably make up at most say 5% of the population? How many person do you think can achieve this?

Then for the last part, Yes I agree with you no absolute right or wrong, but it is the human nature that we tend to be more relax in our spending when we have extra cash (in this context is withdrawal from EPF) and tend to spend more lavishly. So I have to emphasise now this does not apply to everyone but it does happen.
While it sounded like punishing the poor for withdrawing for survival, another point of view is that it also encourage them to replenish their retirement funds when they are able to, and also prevent unnecessary withdrawals. And lastly, taking a general equity mutual fund / UT for example is incorrect. If it is a close ended fund meaning no withdrawal before the end of tenure (similar to EPF), the fund manager may hold less cash in less anticipation of withdrawal as compared to an open-ended fund where withdrawals are common on a daily basis.

Guess the dividend for next year could be quite ugly then, and maybe also expect EPF to sell some of the stocks... I mean a sudden need of such huge sum of funds could mean EPF can single handedly pull down the stock market in the coming weeks?