EPFO prone to improve funding restrict in equities to twenty%

Retirement fund physique EPFO is prone to approve this month a proposal to reinforce its investments in equites to as much as 20 per cent of the investible deposits from the present restrict of 15 per cent. The proposal is anticipated to be thought-about and permitted through the EPFO trustees’ assembly scheduled to be held on July 29 and 30, in response to a supply.

At current, EPFO can funding 5 to fifteen per cent of the investible deposits in fairness or equity-related schemes. The proposal to revise the restrict to twenty per cent has been vetted and permitted by the Employees’ Provident Fund Organisation’s (EPFO) advisory physique Finance Audit and Investment Committee (FAIC).

The advice of FAIC can be positioned earlier than the EPFO apex choice making physique — Central Board of Trustees (CBT) — for consideration and approval.

“The Central Board of Trustees (CBT) headed by Union Labour Minister is likely to approve the recommendation of the FAIC for increasing the investment in equity and equity related scheme to 5-20 per cent from existing 5-15 per cent,” the supply stated.

In a written reply to Lok Sabha on Monday, Minister of State for Labour and Employment Rameshwar Teli stated, “FIAC, a sub-committee of CBT, EPF, has recommended for the proposal to increase investment in equity and related investments in category IV of the Pattern of Investment from 5-15 per cent to 5-20 per cent for consideration of CBT, EPF.”

EPFO had began investing in Exchange Traded Funds (ETFs) in August 2015, placing 5 per cent of its investible deposits in stock-linked merchandise. It was raised to fifteen per cent for the present fiscal. Trade unions have been opposing any funding in inventory markets by EPFO as these will not be backed by authorities assure.

In the written reply, Teli additionally stated the notional return on EPFO equity-related investments rose 16.27 per cent in 2021-22 from 14.67 per cent in 2020-21. The reply additionally confirmed that the notional price of return on fairness associated funding of the the EPFO was in detrimental at (-) 8.29 per cent in 2019-20 because of the impression of COVID-19.

In 2021-22, the minister stated EPFO settled 2,88,15,498 claims for withdrawal of Rs 1,04,959.18 crore by the subscribers. EPFO had settled 2,33,90,550 claims for withdrawal of Rs 91,187.54 crore in 2020-21. The withdrawal quantity was Rs 70,202.34 crore in 2019-20 beneath 1,28,77,354 claims settled by the EPFO.