Retirement fund body Employees’ Provident Fund Organization (EPFO) may this month approve a proposal to increase its investment in equities to 20 per cent from the existing 15 per cent limit. According to a report by Business Standards, the proposal is expected to be considered and approved during an EPFO meeting to be held on July 29 and 30.
At present, EPFO can invest 5 to 15 per cent in equity or in equity-linked schemes. The proposal to revise the limit to 20 per cent has been revised and approved by the Finance Audit and Investment Committee (FAIC), the advisory body of Employees’ Provident Fund Organization (EPFO).
The FAIC recommendation will be placed before the Central Board of Trustees (CBT), the apex decision-making body of the EPFO, for consideration and approval. According to a source in Business Standards, the Central Board of Trustees (CBT) chaired by the Union Labor Minister may approve the recommendation of FAIC to increase investment in equity and equity-related scheme to 5-20 per cent from the existing 5-15 per cent. Is.
Rameshwar Teli, Minister of State for Labor and Employment, said in a written reply in Lok Sabha on Monday that FIAC, a sub-committee of CBT, EPF, has recommended for a proposal to increase investment in equity and related investments in Class IV. The investment pattern has been recommended from 5-15 per cent to 5-20 per cent for consideration of CBT, EPF.
The EPFO had started investing in Exchange Traded Funds (ETFs) in August 2015 and invested 5 per cent of its investible deposits in stock-linked products. For the current financial year, it has been increased to 15 per cent. The MoS said that the estimated return on investment related to EPFO equity is higher by 16.27 per cent in 2021-22 as compared to 14.67 per cent in 2020-21.
The minister said that EPFO had settled 2,33,90,550 claims for withdrawal of Rs 91,187.54 crore in 2020-21. Of the 1,28,77,354 claims settled by the EPFO, the withdrawal amount in 2019-20 was Rs 70,202.34 crore.