The Employees’ Provident Fund Organization has given the lowest interest rate of 8.1 percent for this financial year in four decades. However, EPF money has not been released in the account of the employees yet. At the same time, the Central Board of Trustees (CBT), the decision-making body on EPFO, is going to meet in Bengaluru on June 25-26. In this meeting, the issue of raising the equity exposure of EPFO to 25 percent will be discussed.
At present, the equity exposure of the PF account is 15 percent. If the increase in exposure is approved, then more PF money of the employees will be invested in the stock market. In such a situation, it can be expected that when the stock market is hot, investors can get high returns. It is worth mentioning that EPFO is maintaining 24 crore accounts of its members, in which capital of about Rs 17 lakh crore is deposited.
This financial year, the interest rate on PF account has been fixed by EPFO at 8.1 percent. Due to such low interest rates, it was considered in a meeting of the CBT in the meeting last month to increase the maximum limit for investment in equity from 15 to 25 percent. It was told in the meeting that this increase is necessary so that investors can get high returns.
Ministry can give final decision
At the same time, 25 percent equity shares can be considered in the meeting to be held on June 25-26. After this the report will be submitted to the ministry for approval. It can be implemented only if the personnel ministry gives its decision.
EPFO investment pattern in equities
Currently EPFO invests up to 15 per cent in equities, EPFO invests in equities in the form of Exchange Traded Funds (ETFs) on Nifty and Sensex. Let us inform that EPFO has started investing in ETFs from 5th August 2015 and earlier its limit was 5 percent which increased to 10 percent in 2016 and next year 2017 to maximum 15 percent.