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# EPF declared 6.9% (conventional) / 6.4% (shariah) dividend for 2017

The Employees Provident Fund (EPF, a.k.a. KWSP) has just declared the dividend rate for financial year 2017.

If you still remember, earlier on, EPF has launched its Simpanan Shariah Islamic saving account beside its conventional saving account. Members can apply to switch their account type from conventional to Shariah at their own will.

Year 2017 was the first year of dividend declaration for Shariah account, while dividend for conventional account has been declared annually since 1952.

For year 2017, the dividend declared for conventional account is 6.9% while for Shariah account is 6.4%. The dividend has already credited into members' account, and you can check for it by login into your EPF i-Account.

The 6.9% dividend for EPF conventional account in 2017 is 21% higher than the 5.7%  dividend declared for 2016 (last year).

Calculation: (6.90-5.70)/5.70 = 1.20/5.70 = 21%

It is also 7.8% higher than the 6.4% Shariah dividend declared for the same year.

Calculation: (6.90-6.40)/6.40 = 0.50/6.40 = 7.8%

It seems that members who had opted to convert their account to Shariah might be upset and regret, due to the lower dividend in 2017.

According to EPF, the Shariah account derived its income solely from its portion of shariah assets while for conventional account, a total of 38% of the income was generated by its share of Shariah assets and 62% from non-Shariah assets.

The returns for conventional account were enhanced by the income generated from non-shariah investments following the outperformance of global banking stocks, while Shariah account does not include conventional banking stocks due to their non-Shariah compliant status.

In addition, equity impairments from shariah-compliant stocks, particularly the oil and gas, and telecommunication counters, has lowered the income of the EPF's shariah portfolio.

Is the 6.9%/6.4% dividend considered good or not? The 6.9% dividend rate is the best since year 1996. However, EPF had been consistently declaring dividends of above 7% from 1976 until 1996! The dividend rate had even been consistently above 8% during 1980-1994. So, you judge yourself!

You can click here to check the historical EPF dividend pay-out rates from 1952 until today to have a clearer picture.

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