Just last week, EPF (aka KWSP) declared a 4.50% dividend for the year 2008. A few people were wondering how to calculate the dividend that they would receive.
If you’re one of them, do read on.
The following is just the theory behind the calculation of the dividend. There may be a variation of a few sen, most probably due to KWSP’s rounding error.
Steps in calculating your dividend:
1. Take your balance brought forward as at January 1, 2008 and multiply that with the dividend rate.
2. For each contribution month (Bulan Caruman), use the following formula:
Month’s contribution (RM) x Dividend rate (%) x (12-n*)/12
n = The number corresponding with the month, i.e. January = 1, February = 2, etc.
3. The following formula regards leap years:
Month’s contribution (RM) x Dividend rate (%) x (366-n*)/366
Leap years have 366 days, and n = The accumulated number of days to the contribution. i.e Jan has 31 days, Feb has 29 days, and n = 31 days + 29 days = 60 days
4. Add all the amounts together to get your dividend for the year.
The explanantion for taking (12-n)/12 is due to the fact that KWSP only receives returns from investing your contribution a month later (estimated).
Click Here For Table Example (Stolen From My Sister’s EPF Hee Hee)
This entire table and all calculations were courtesy of my sister, Ms. Amanda Chan Mei Yee. If your calculations are wrong, please blame her instead. I take no credit whatsoever for this post, nor any blames that come my way.
Edit #1: Thank you Mr. Gary for kindly pointing out the formula regarding leap years.