EPFO May Give Subscribers Option To Increase Stock Investments In New Year
Traders work on the trading floor of the Motilal Oswal Financial Services Ltd. office in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

EPFO May Give Subscribers Option To Increase Stock Investments In New Year

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Subscribers of the retirement fund body Employees’ Provident Fund Organisation may get an option in the new year to invest more of their savings in the equity market, besides a host of other social security benefits and digital tools to manage their funds.

At present, the EPFO invests up to 15 percent of its investible deposits into the exchange traded funds and so far such investments total about Rs 55,000 crore.

The ETF investments, however, do not reflect in members’ account and they do not have an option to increase the proportion of their retirement savings to be invested into stocks.

The EEFO is now developing a software that would help show retirement savings in cash and ETFs components separately. At present, the account only shows the savings as gross cash component.

Once the cash and ETF components are shown separately in the EPF accounts, the next big leap for the EPFO would be to give an option to subscribers to increase or decrease investments in stocks.

Earlier this year, the EPFO’s apex decision-making body, the Central Board of Trustees, had suggested exploring the possibility of giving such options.

Labour Minister Santosh Gangwar who is also chairman of the CBT told PTI, “By introducing numerous digital tools, the service levels for workers as well as employers have been eased a lot. By way of supplementing the employer’s share of contribution at the rate of 12 percent, a good number of approximately 90 lakh new employees are extended the benefit of social security net through the EPFO.”

Also read: 8.27 Lakh Jobs Were Created In October, According To EPFO Data

Under Pradhan Mantri Rojgar Protsahan Yojana, the government is now paying full employer’s contribution (EPF and EPS both) with effect from April 1, 2018 for a period of three years to the new employees as well as to the existing beneficiaries for their remaining period of three years.

In 2018, a pensioners’ portal was also launched through which all EPFO pensioners can get details of pension-related information.

The EPFO now covers 190 industries (mentioned in schedule 1 of the EPF Act) with over 20 crore accounts in over 11.3 lakh covered establishments.

For the EPFO’s 63.2 lakh pensioners, 55.3 lakh Jeevan Praman have been received as on Oct. 29, 2018 and 49.4 lakh have been approved.

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