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THE Employees Provident Fund is expected to deliver another competitive dividend payout for 2025, with projected rates of between 5.8 and 6.3 per cent for Conventional Savings and 5.5 to 6.0 per cent for Shariah Savings, reflecting robust investment income tempered by prudent fund management.
Senior Consultant at Global Asia Consulting, Samirul Ariff Othman, said the outlook is consistent with the fund’s strong performance in the first nine months of the year, while remaining subject to disciplined profit realisation and the long-term reserve requirements of Malaysia’s largest retirement fund.
“Based on nine-month performance and EPF’s own discipline on realisation and reserves, the expectation for the 2025 dividend is around 5.8 to 6.3 per cent for Conventional Savings and around 5.5 to 6.0 per cent for Shariah Savings,” he said.
Samirul stressed that not all gains recorded on paper can be distributed to contributors, particularly unrealised gains driven by market valuations or currency movements.
“The EPF has stressed that mark-to-market gains, including those driven by foreign exchange and which remain unrealised, cannot be distributed as dividends,” he said.
While global markets have shown signs of recovery, he said the final dividend outcome depends on how much income is actually realised and how much must be retained as reserves to safeguard the fund’s long-term stability.
“These factors directly cap the dividend ceiling, even when investment income appears high on paper,” he said.
Explaining the expected gap between Conventional and Shariah savings, Samirul said Shariah portfolios typically deliver slightly lower returns due to structural constraints.
“The Shariah portfolio does not have conventional bonds, has less flexibility in certain hedging instruments and is more sensitive to equity cycles,” he said.
He added that while the gap may narrow in strong recovery years, in periods of heightened global uncertainty such as 2025, a difference of about 0.2 to 0.3 percentage points remains common.
Samirul also dismissed expectations of dividends rising as high as 6.5 or 7.0 per cent, despite the encouraging nine-month performance.
“The EPF’s mandate is not to maximise dividends in a single year, but to ensure the sustainability of returns over the long term,” he said.
With total assets exceeding RM1 trillion, an ageing contributor base and increasingly critical reserve requirements, he said the fund remains highly sensitive to the risks of over-distribution.
“From a retirement fund governance perspective, a rate of 5.8 to 6.3 per cent for Conventional Savings is already within a competitive, defensible zone without compromising reserve discipline,” he said.
He noted that while performance over the first nine months was strong, EPF itself has signalled a more cautious stance entering the final quarter of the year.
“Global equity valuations are already elevated, and EPF has begun accelerating profit-locking as it does not expect end-year market conditions to be as favourable as the first nine months,” he said.
Samirul added that expectations for the EPF dividend are broadly aligned with positive sentiment following the stable dividend declaration by Amanah Saham Bumiputera, although the two should not be directly compared.
“ASB only provides supportive sentiment. EPF is far more exposed to global markets, foreign exchange movements, geopolitics and international interest rate cycles,” he said.
For the first nine months of 2025, EPF’s investment income reached RM63.99 billion, an increase of 11 per cent from RM57.57 billion recorded in the same period a year earlier, underscoring a healthy earnings trajectory.
Meanwhile, Universiti Teknologi MARA senior lecturer in economics and finance, Dr Mohamad Idham Md Razak, said the nine-month investment performance provides an encouraging early signal for dividend sustainability in 2025.
“While stable income shows EPF’s ability to generate healthy returns, the final assessment still depends on fourth-quarter performance and the need to maintain sufficient reserves,” he said.
He added that stable ASB dividends may be viewed as a positive indicator for domestic assets, but should be seen as supportive rather than decisive in determining EPF’s dividend outcome. - February 4, 2026
