EPF: Double-digit payout impossible unless...

KUALA LUMPUR: The Employees Provident Fund (EPF) said it is impossible for it to pay double-digit dividends in the near future unless interest rates in government securities it owns also give higher yield.


EPF chief executive officer Tan Sri Azlan Zainol said although the stock market can give the provident fund a payout of 11 per cent, but when added up all altogether with its other investment portfolios, total dividend will be a single-digit payout.

EPF declared a six per cent dividend for 2011, compared to 5.8 per cent in 2010.

"I would also like to deny that the six per cent dividend announced last month was an election dividend. With the exception of 2008, EPF has been paid strong dividends for the past 10 years.

"The allegation that the six per cent dividend is an election ploy is not true," he told Business Times at its headquarters here recently.

Azlan added that the dividend, which was the highest in a decade, was coincidental and in line with the strong incremental growth the 61-year-old provident fund has registered over the years.

"We also do not distort the market. It is all unintentional. We transact over three million shares at any one time; of course the market will be distorted," Azlan said.

EPF, which is the world's seventh largest provident fund, pays out all of its dividends and does not keep a portion of it to be carried forward later.