EPF beats inflation historically: CPF?


Has our CPF Ordinary Account’s interest rates been beating inflation, historically?

I refer to the article “Malaysian pension fund set to make record payout” (Straits Times, Feb 10).

It states that “”We have been informed it will definitely be higher than before,” an EPF board member told The Straits Times ahead of Saturday’s (Feb 10) expected dividend announcement.”

The EPF, which manages RM800 billion in assets, declared a dividend of 5.7 per cent last year and 6.4 per cent in 2016, with total payouts amounting to RM37 billion and RM38 billion, respectively.

EPF chief executive Shahril Ridza Ridzuan has also said last month that the country’s largest asset manager is set to continue a five-year track record of beating inflation by at least 3.5 percentage points, far surpassing its self-imposed target of a minimum real dividend of 2 per cent.

He said this just before Malaysia revealed that last year’s inflation was 3.7 per cent. This means that the EPF dividend would have to be at least 7.2 per cent to match the fund’s performance in the past five years.”

Why is it that our CPF interest rates historically, are so much lower than EPF’s?

Leong Sze Hian

About the Author

Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.