EPFO likely to come out with another detailed circular - Karma Global
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Proposal to hike equity investment limit to 20% deferred by EPFO trustees

The retirement fund body has not taken up the proposal to hike the investment limit in equities to 20 percent from the existing 15 percent, after the demand for more deliberation from employees’ representatives in its trustees’ meeting on Saturday.

The EPFO is currently allowed to invest up to 15 percent of its incremental inflow in equity. It (FAIC) had approved the proposal to revise the limit to 20 percent, reasoning that higher exposure to stocks may yield better returns.

The board agreed in principle to the idea of higher equity allocation to improve returns, but will discuss the issue further after September, ET reported, citing officials.

The  (CBT) of the EPFO approved face authentication technology for digital life certificates, cleared a new central payment system for pensioners, and proposed a detailed legal framework to minimize litigation, they said. The board also discussed ways to allow self-employed and unorganized people to enroll with the EPFO.

“The board agreed on hiking the (investment) limit to increase profit, but it felt this is not the right time to tweak the equity exposure as the market is still susceptible to global shocks,” said an official with knowledge of the matter. The issue will be taken up at the next meeting.


Proposal to hike equity investment limit to 20% deferred by EPFO trustees – CBT has approved face authentication technology for digital life certificates

The EPFO has announced 8.1 percent interest for FY22, the lowest since the fiscal year 1977-78 when it had credited 8.0 percent interest. It had credited 8.5% in FY21 and FY20.

Trade unions have been opposing any investment in stock markets by the EPFO as these are not backed by government guarantees. They cited the slump soon after the pandemic took hold when their return from equity was negative 8.29 percent. The EPFO started investing in equities through exchange-traded funds (ETFs) in August 2015.

Face authentication will allow pensioners to avail of benefits from home. “The CBT has approved face authentication technology for digital life certificates,” labour and employment minister said after the meeting. “Now pensioners will not be required to go anywhere for their EPFO pension.”

He added that the organization is working on expanding the convergence of the Employees’ State Insurance Corporation) scheme with the Ayushman Bharat scheme to bring the unorganized sector into the social security net and provide cashless medical facilities across the country. Currently, the convergence facility is limited to a few states.

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