INSUBCONTINENT EXCLUSIVE:
The EPFO body had sold ETFs worth Rs 2,500 crore in March this year
The Employees Provident Fund
Organisation (EPFO) subscribers may soon have an option to increase or decrease investments out of their provident fund into stocks through
exchange trade funds (ETF)
In a meeting of Employees' Provident Fund Organisation's apex decision making body Central Board of Trustees (CBT), it was decided to
explore the possibility of giving an option of enhancing or reducing equity allocation
If approved, the EPFO subscribers will be able to increase beyond mandated equity investment limit (of 15%) or to reduce equity allocation
below the limit to the subscribers.The EPFO has invested Rs 41,967.51 crore in ETFs with return of 17.23 per cent as on February 28, 2018
10 PointsEquity investment in EPFO
Currently, the EPFO subscribers have no such option and the body investment 15 per cent of its investible deposits into the ETFs
Earlier last year, the CBT had approved an accounting policy to credit ETFs into the members account apart from cash component.2
The central board of trustees (CBT) has approved the recommendation of the EPFO's advisory body Finance Investment and Audit Committee
(FAIC) recommendation that subscribers are allocated equity units only for 15 per cent of their contributions, and all units over and above
this allocation to all the subscribers would be held by the EPFO, a statement issued by the body said.3
The trustee also approved the FAIC recommendation of formulating a separate policy for periodic disposal of these equity units and a
separate reserve fund for smoothening out volatility of equity returns and to provide equitable returns to all the subscribers.: Don't Deny
Pension To People Without Aadhaar : EPFO Tells BanksAccording to FAIC recommendation approved by the CBT, after operation of this new
accounting methodology (crediting ETFs into EPF accounts) for a certain period, the possibility of giving an option to subscribers to
increase or decrease investments in stock should be explored.4
The EPFO has planned to credit ETFs into the EPF accounts from April this year after implementation of this new accounting methodology.5
The EPFO had started investing in August 2015
In 2015-16 it invested 5 per cent of its investible deposits which was subsequently increased to 10 per cent 2016-17 and 15 per cent in
