EPFO update: Central Board of Trustees meet to decide on proposals — ETF investment increase to 15%? Details here | Mint
Source: Live Mint
The Employees Provident Fund Organisation’s Central Board of Trustees is set to meet today, November 30, to decide on various proposals, according to a Business Today report citing sources.
Chaired by Union Labour and Employment Minister Mansukh Mandaviya, the CBT is the EPFO’s apex decision-making body.
The proposals under discussion include the redemption policy for increased investments in equity traded funds (ETFs), re-investment of ETF proceeds, guidelines for investments into real estate investment trusts (REITs), and the annual performance portfolio of EPFO managers, it said.
Re-investment of redemption proceeds from ETFs into equity, assets
The report cited sources say that the EPFO is considering re-investment of some parts of the redemption proceeds from ETFs into equity and other assets to improve returns.
Investment in ETFs began in FY26, with an initial exposure of 5 per cent of incremental deposits, which has now increased to 10 per cent. Plans are for this to increase to 15 per cent, it added. As of March 31, 2024, the EPFO has investment 9.5 per cent ( ₹2.35 lakh crore) of its investible corpus in ETFs.
One official, however, told the publication that such considerations are not on the table. “This is the hard-earned money of workers. We need to protect it from too much volatility. While equity markets are giving good returns now, it could not always be the case,” the official said.
Investment in REITs, ITTs
Further, the report said that the CBT will also consider guidelines to invest EFPO in real estate investment trusts (REITs) or SEBI regulated Infrastructure Investment Trusts (IITs)
Annual Performance, Annual Report
A review of portfolio managers’ annual performance and approval for the draft annual report for FY24 is also on the cards, it added.
The EPFO will also share the status of the implementation of the Supreme Court’s ruling on higher pensions.
Hike in EPS Contribution
According to a PTI report citing a source, the Labour Ministry is mulling a revamp of the Employees’ Pension Scheme 1995 (EPS-95) to allow more contribution by members for higher retirement benefit.
At present, EPFO members can contribute 12 per cent of their basic salary to the EPF account. The source told PTI that members will get more pensions if they contribute more to their EPS-95 account, and this option is thus being considered.
