KWSP EPF Declares 6.35% for 2013

Posted by Kris | Tuesday, February 18, 2014 | | 13 comments »

EPF
EPF

KUALA LUMPUR: The Employees Provident Fund (EPF) today declared a dividend rate of 6.35 per cent for the financial year ending Dec 31 2013, representing the biggest ever dividend payout of RM31.2 billion to its members, up 13.66 per cent over the RM27.45 billion paid in 2012.




2013 payout is the highest in 14 years if i am not mistaken. Some summary from @Maveric.



-2013 gross investment income was actually RM35 Billion.Total dividend payout was RM31.02 Billion.


-The RM3,980,000,000.00 difference 
was deductions for.............
-net impairment allowance financial assets (Not sure what is this?)
-investment expenses.
-operating expenditure.
-statutory charges..?
-dividend on withdrawals.

This RM3.98 Billion is a hefty 11.37% of the total RM35 Billion gross investment income .

EPF claim to have 13 Million members & this RM3.98 Billion deduction works out to be RM306/member.It sure work out to be hell lot of 'overhead charges' for each member.

##KRIS

Key item that attracted my attention is: 

Samsudin noted that as the EPF membership rose to more than 13 million, a total of RM4.91 billion was required to pay every one per cent dividend rate for 2013. 

“The amount needed to pay a one per cent dividend would continue to grow between eight and nine per cent annually,” he said.


If you calculate (4.91b/100)*35 <0 .35=""> + 6 <6>*4.91b = 31.2billion.


The above statement sounds weird at first, because if you take it by face value, why does it takes 8%-9% cash (profit generated before expenses) to payout a 1% dividend. It means that the expenditure is cutting a huge chunk out of the dividend payout. Perfect & ideal text book answer would be 1% profit generating cash enough for 1% dividend return.

To be fair, maybe I should google how does our Singapore counterpart perform in terms of this in the future. Now I am too busy, but I am curious.

I wonder where can we see the breakdown of each expenditure and how much the fund managers are being paid for their performances.

This was 10.06 per cent higher compared with RM4.46 billion paid for every one per cent dividend rate for 2012. 


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13 comments

  1. kampunginvestor // 6:47 PM  

    I don't think so EPF will be that transparent with our money.

    Just my 2 cents! -,-!!

  2. maveric // 11:32 AM  


    I am not sure ... but EPF is a statutory body.Probably,it is in the same category of stat bodies like MPPP,MPSP etc2

    Statutory entity or not..it is only expected that they need to 'open' up their accounts to 13 million members.It would be the right thing to do.I am still puzzle over the difference between operating expenditure and statutory charges..!!

    RM3,980,000,000.00 is a lot of money lei...( it is the full cost of KLIA 2 !!!)

    All EPF contributors are ' wage earners' technically hence every cent count..!

  3. Kris // 9:38 PM  

    @maveric,

    how is life in the retirement lately?

  4. maveric // 3:18 PM  

    @ Kriss,

    Seriously,life couldn't be better than what I am in now ! As you are aware,my belief that one can survive on EPF's dividends is coming true.My forecast was RM5k-6k per month but it has moved up to the RM6-7k bracket with the latest dividend rate! (I am still utilizing my cash reserve & EPF in the background ..is a real comfort with its >6% av d.rate for the last 3 years.

    As you probably know,I had 3 proper travel trips in '13 ; Eastern Europe> cities like Prague,Budapest,Munich,Nuremberg,Krakow & Vienna etc.Closer to home,I really like Hokkaido,Japan.
    I will be going to Western Europe later in '14..! I am blessed !


    For the last 8 months or so,I have become ' laku' again when I was 'invited' to do a task.....to help transform a 'Chinaman' company to a more contemporary corporate style in management!! Well,the Chinaman boss believes that this is vital for the long term survivor of his company.I had & I am still having such interesting times.Of course,the allowance coming forth also mean that I need not touch EPF yet!!


    Cheers

  5. ChampDog // 4:31 PM  

    Maveric leads me here to see his update. I guess you haven't approved his comment yet?

  6. ChampDog // 5:53 PM  

    Wow, seems like you get back to work as a consultant? Sounds very geng chow!

    What is contemporary corporate style?

  7. Kris // 6:01 PM  

    @maveric,

    So enjoy life man! Good!

    I thought you were in the sales line, now become consultant to modernize chinamen company.

    Can hire me also, since i am been in the corporate world for a long time..lol

    I still don't have RM 1million in my EPF T.T

  8. Kris // 6:07 PM  

    @champdog,

    Miss Malaysian food already? :D lol.. I bet you do..

  9. ChampDog // 6:17 PM  

    Miss Nasi Kandar!!!... lol

  10. Maveric // 12:50 AM  

    @Kriss & ChampDog

    This Chinaman company I am ' helping ' really was quite messy initially. There was no proper reporting structure and departmental protocol whatsoever .... apparently the boss was the only focal point and ...issues ... 'Big & small', trivial & serious were all referred to him right from the van's drivers to the accountant and of course,everybody in between.

    He became a nervous wreck at times and he chalked up more than RM2k in phone bill for a week vacation in Japan!

    Things have since turned out to be much better... with the setting up of proper departments , line of reporting & protocol practices.Please....I am no management expert but these are the practices of ' contemporary corporation'...

    Yes.. I was in sales but the exposure in MNC's for so many years gave me a fair idea as to how they are run effectively .....it turns out to be a great challenge to adopt some of these in a chinaman company....


    Cheers

  11. Kris // 1:43 PM  

    @Maveric,

    Yes. MNC typically has processes & protocol. Sometimes it can be very tedious to follow everything by the book but important to avoid the above situation. Chain of command is important.

    At least you are spending your time in leisure and make some pocket money in between. Else, it can be very boring at retirement life.

  12. maveric // 4:15 PM  


    @Kriss

    Woah...You are still very young I assume & you have still many years to build up you EPF's fund..lol!

    Coming back to this chinaman company,we had a client ' obituary' general issue just the other day and all along,the sales person attends the wake,pays the 'pek kim' & claim it back from the company.

    The boss wanted my view..I told him that the biz accepted way would be to send a 'floral wreath'instead which is more in line with corporate practice..& this was adopted as a SOP.Many in the chinaman company did not share my view .. but that is that...

    Funny issue ..sometime.

    Cheers..

  13. Kris // 8:13 AM  

    For most old-timer employees, it is hard to adapt to the change of corporate culture, unless one is versatile and adaptive.

    It is the same for us; most people get used to MNC culture, so jumping to chinaman company can be shocking!! vice versa is true.