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Retirement fund body Employees' Provident Fund Organisation (<keyword id="6372438" type="General" weightage="20" keywordseo="epfo" source="Orion">EPFO</keyword> ) has <keyword id="6516414" type="General" weightage="20" keywordseo="invested" source="Orion">invested</keyword> Rs 27,105 crore in exchange-traded funds (<keyword id="46594" type="General" weightage="20" keywordseo="etfs" source="Orion">ETFs</keyword>) during the current fiscal till October, Parliament was informed on Monday. EPFO had invested Rs 53,081 crore in the ETFs during the fiscal 2022-23, higher than Rs 43,568 crore in 2021-22, Minister of State for Labour and Employment Rameshwar Teli said in a written reply to the Lok Sabha. The reply showed that the EPFO has invested Rs 27,105 crore in the ETFs so far in the current fiscal 2023-24 till October 2023. The body had invested Rs 14,983 crore in ETFs in 2016-17, Rs 24,790 crore in 2017-18, Rs 27,974 in 2018-19, Rs 31,501 crore in 2019-20 and Rs 32,071 in 2020-21, according to the reply. Teli explained to the House that the EPFO does not invest directly in individual stocks, including stocks of any blue-chip company. EPFO invests in equity markets through ETFs, replicating <keyword id="19783518" type="General" weightage="20" keywordseo="bse-sensex" source="Orion">BSE-Sensex</keyword> and <keyword id="3092508" type="General" weightage="20" keywordseo="nifty-50" source="Orion">Nifty-50</keyword> indices, Teli said. It has also invested from time to time in ETFs constructed specifically for disinvestment of shareholding of the central government in body corporates, he informed the House. The body invests funds as per the investment pattern notified by the government, he stated. The total corpus of various funds managed by the EPFO as of March 31, 2022, was Rs 18.30 lakh crore, out of which 8.70 per cent is invested in ETFs and 91.30 per cent are in debt investments, including Public Account of India. The EPFO started investing in the ETFs (exchange-traded funds) in August 2015.

EPFO invested Rs 27,105 crore in exchange trade funds in Apr-Oct: Labour Min

Retirement fund body <keyword id="6372438" type="General" weightage="100" keywordseo="epfo" source="Orion">EPFO</keyword> is likely to approve this month a proposal to enhance its investments in equites to up to 20 per cent of the investible deposits from the current limit of 15 per cent. The proposal is expected to be considered and approved during the EPFO trustees' meeting scheduled to be held on July 29 and 30, according to a source. At present, EPFO can investment 5 to 15 per cent of the investible deposits in equity or equity-related schemes. The proposal to revise the limit to 20 per cent has been vetted and approved by the Employees' Provident Fund Organisation's (EPFO) advisory body Finance Audit and Investment Committee (FAIC). The recommendation of FAIC will be placed before the EPFO apex decision making body -- <keyword id="225704" type="General" weightage="50" keywordseo="central-board-of-trustees" source="Orion">Central Board of Trustees</keyword> (<keyword id="207775" type="General" weightage="50" keywordseo="cbt" source="Orion">CBT</keyword>) -- 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 source said. In a written reply to Lok Sabha on Monday, Minister of State for Labour and Employment Rameshwar Teli said, "FIAC, a sub-committee of CBT, <keyword id="45027" type="General" weightage="50" keywordseo="epf" source="Orion">EPF</keyword>, 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 started investing in Exchange Traded Funds (ETFs) in August 2015, putting 5 per cent of its investible deposits in stock-linked products. It was raised to 15 per cent for the current fiscal. Trade unions have been opposing any investment in stock markets by EPFO as these are not backed by government guarantee. In the written reply, Teli also said 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 also showed that the notional rate of return on equity related investment of the the EPFO was in negative at (-) 8.29 per cent in 2019-20 due to the impact of COVID-19. In 2021-22, the minister said 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 amount was Rs 70,202.34 crore in 2019-20 under 1,28,77,354 claims settled by the EPFO. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/rbi-seeks-a-crypto-ban-but-it-needs-global-collaboration-says-nirmala-sitharaman/articleshow/92954958.cms">RBI seeks a crypto ban but it needs global collaboration, says Nirmala Sitharaman</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/nifty-50-remains-the-top-performer-in-asia-despite-tussle-between-bulls-and-bears/articleshow/92952677.cms">Nifty 50 remains the top performer in Asia despite tussle between bulls and bears</a>

Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

New Delhi, Dec 2 () Retirement fund body EPFO has invested Rs 86,966 crore in exchange traded funds (ETFs) till September 2019, Parliament was informed on Monday.
The EPFO has been investing in ETFs since August 2015. Initially, the body decided to invest 5 per cent of its investible deposits into stock markets. Later, the proportion was increased to 10 per cent in 2016-17 and 15 per cent in 2017-18 and onwards.
The Employees' Provident Fund Organisation (EPFO) is investing in ETFs based on Nifty 50, Sensex, Central Public Sector Enterprises (CPSEs) and Bharat 22 Indices. 
 "The total amount invested by EPFO in ETFs as on September 30, 2019 is Rs 86,966 crore. The Central Board of Trustees (CBT), Employees' Provident Fund (EPF) in its 207th meeting held on March, 31, 2015 decided to invest only in ETFs in the category of equity and related investments," Labour Minister Santosh Gangwar said in a written reply to the Lok Sabha.
The minister told the House that the EPFO does not invest in shares and equities of individual companies.
The Employees' Provident Funds &amp; Miscellaneous Provisions (EPF &amp; MP) Act, 1952 is applicable to every establishment employing 20 or more persons.
 In order to extend social security benefits to all eligible workers in the country, continuous efforts are made to bring the coverable establishments under the EPF &amp; MP Act, 1952 and also for bringing the eligible employees under the umbrella of schemes under the Act.
 The minister told the House that as on March 31, 2019, 197 industries/classes of establishments are notified for coverage which has brought 4.69 crore contributory members within the ambit of EPFO. KKS
 KKS ANU
ANU

EPFO's investment in ETFs at Rs Rs 86,966 cr till September

Employee Provident Fund Organisation (<keyword id="6372438" type="ORGANIZATION" weightage="100" keywordseo="EPFO">EPFO</keyword>), India’s <a href="http://www.businessinsider.in/Your-PF-will-now-earn-interest-even-if-your-employer-has-stopped-contributing-to-it/articleshow/51599478.cms">retirement fund</a> body, might be doubling its investment proportion in exchange traded funds (ETFs) to 10% its investment, a move which can shoot up friction with trade unions. 
 
EPFO's finance audit and investment committee (FAIC) set up a panel that suggested doubling the proportion of its investment in ETFs so that it can do a meaningful contribution to the overall portfolio return of the <a href="http://www.businessinsider.in/Low-cost-housing-scheme-for-EPFO-subscribers-soon/articleshow/52194557.cms">EPFO</a>, and a final decision could be taken in EPFO's central board of trustees (CBT) meeting today. 
 
Also read: <a href="http://www.businessinsider.in/PF-money-for-government-flagship-programmes/articleshow/52725007.cms">If you don’t claim your PF now, it could end up in government’s kitty</a> 
 
Till now, EPFO invested 5% of its investible deposits in ETFs even as labour unions opposed it, and now, as the investment is planned to be doubled, the unions are definitely not going to accept it silently. 
 
Also read: <a href="http://www.businessinsider.in/Defer-withdrawal-for-two-years-and-get-8-16-extra-benefit-from-EPFO/articleshow/52881298.cms">Defer withdrawal for two years and get 8.16% extra benefit from EPFO</a> 
 "As per the agenda, the labour ministry will update us on the EPFO's investment in equity as well as place before us the report of the expert group. However, unions will continue to oppose any such investment," DL Sachdev from All India Trade Union Congress (<keyword id="6357806" type="ORGANIZATION" weightage="100" keywordseo="AITUC">AITUC</keyword>), and a member of CBT told <a href="http://economictimes.indiatimes.com/wealth/personal-finance-news/epfo-likely-to-raise-equity-investment-to-10/articleshow/53366787.cms">ET</a>. 
 
<a href="http://www.adamsaccounting.com.au/photos/Investment1.jpg">Image source</a>

EPFO might raise ETF investment to 10%

Retirement fund body <a href="http://www.businessinsider.in/searchresult.cms?query=EPFO+">EPFO</a> will invest around Rs 410 crore in exchange trade funds (<keyword id="6357062" type="ORGANIZATION" weightage="60" keywordseo="ETF">ETF</keyword>) every month during the current fiscal. 
 "<keyword id="6372438" type="ORGANIZATION" weightage="80" keywordseo="EPFO">EPFO</keyword> can invest around Rs 410 crore in <a href="http://www.businessinsider.in/searchresult.cms?query=ETF+">ETF</a> every month during this fiscal. The body has planned to invest 5 per cent of its incremental deposits every month," a senior EPFO official told PTI. 
 
The EPFO has received an average monthly incremental deposits of Rs 8,200 crore during this financial year so far. Thus, 5 % of incremental deposits comes to around Rs 410 crore. 
 The Employees' <keyword id="122254" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword>'s (EPFO) apex decision making body the Central Board of Trustees' headed by the Labour Minister <keyword id="115762" type="PERSON" weightage="80" keywordseo="Bandaru-Dattatreya">Bandaru Dattatreya</keyword> had decided in March to start investments in stock market. 
 
However, it was assured to the trustees in the meeting that being cautious about the volatile nature of stock market and with no prior experience of such investments, EPFO will start with investing in ETF during the current fiscal. 
 
An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. 
 
Following the CBT decision, <a href="http://www.businessinsider.in/searchresult.cms?query=Labour+Ministry+">Labour Ministry</a> had notified new investment pattern in April which provided that EPFO will invest a minimum of 5 per cent and up to 15 per cent of incremental deposits in equity or equity-related schemes. 
 
However, EPFO has not invested in any ETF so far, the official said that <a href="http://www.businessinsider.in/searchresult.cms?query=SBI+">SBI</a> Mutual funds has be asked to handhold the body for its investments in the ETF and understand the dynamics of <a href="http://www.businessinsider.in/searchresult.cms?query=stock+market">stock market</a>. 
 
(Image: Indiatimes)

EPFO to invest about Rs 410 crore in ETFs every month

<ul><li>EPFO on Wednesday decided to provide an 8.5% rate of interest on employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">provident fund</keyword> (EPF) for 2019-20 as committed earlier but in two tranches.</li><li>Business Insider spoke to experts to understand the impact of this move. </li><li><a href="https://www.businessinsider.in/">Check the latest news and updates on Business Insider. </a></li></ul> Retirement fund body EPFO on Wednesday decided to provide an 8.5% rate of interest on employees' provident fund (EPF) for 2019-20 as committed earlier but in two installments. According <a href="https://www.firstpost.com/business/epfo-to-pay-8-5-interest-for-fy20-in-two-instalments-cites-covids-impact-on-income-8800771.html">to a PTI source, </a>the EPFO will provide an 8.15% interest on EPF soon, and the remaining 0.35% rate would be credited into the subscribers' account by December 31, after the proposed liquidation of ETFs. "In view of exceptional circumstances arising out of COVID-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate of 8.50% to the Central Government,” <a href="https://www.firstpost.com/business/epfo-to-pay-8-5-interest-for-fy20-in-two-instalments-cites-covids-impact-on-income-8800771.html">the EPFO statement read. </a> Business Insider spoke to experts to understand the implications of the proposal. "In my opinion, there is no need to panic; the interest rate tranches of 8.15% and 0.35% is yet to be approved by the finance ministry and more so since the government has already declared the source of balance interest payment, which is 0.35%, from exchange-traded funds," Manjula Muthukrishnan, Managing Director - India, Avalara Technologies Pvt. Ltd. said. She further added, "We trust that the authorities have thought through the unique situation with back up plans. Subscribers should also note that the credit of interest in multiple instalments affects only to those subscribers who would be withdrawing the amounts soon and not applicable to all." Chetan Yadav, Chief People Officer, Tally Solutions, believes that since EPFO is a longer-term account, the proposal might not affect the cash in hand. “It is fine even if it is paid in instalments. Had COVID-19 not happened, EPFO would have come out with a lower interest rate. The fact that they’re accommodating with the situation is positive news,” Yadav told Business Insider. However, Diva Sharma thinks otherwise. According to him, the proposal is only going to make EPFO investors anxious. “EPFO investors and trade unions were already unhappy with the earlier decision to reduce the interest rate from 8.65% in 2018-19 to 8.50% in 2019-20. This news brings in further apprehension in the mind of EPFO investors on its ability to ensure investment returns on the corpus for paying 8.5% interest in the coming years as the yield from debt instruments are falling and equity markets are highly volatile,” says Divam Sharma, Co-founder, Green Portfolio. Sharma said EPFO doesn’t have the cash to pay its subscribers as their ETF investments (usually 85% in Debt instruments and 15% in Equity instruments) have shown negative returns in the last five years. EPFO was also forced to sell some of their Equity ETFs to raise cash for paying the balance 0.35% interest (from the proposed 8.5% for 2019-20). Apart from the shortage of cash, EPFO is yet to clarify a range of issues. “Questions that still remain unanswered are (a) Employees who withdrew their EPF on account of losing their jobs in the exceptional situation of the Covid-19 Pandemic, would they still be eligible for this interest? (b) If an employee has withdrawn his EPF partially, what would be the base on which interest will be calculated for FY 19-20? Also going forward for the next FY 20-21 what would be the base on which interest would be calculated?” Smita Goel, Partner, Taxation, Algo Legal said. On the other hand if EPFO decides to pay the interest in one go, as media reports suggest, EPFO will face an income shortfall of roughly ₹2,500 crore, according to Manjula Muthukrishnan, Managing Director - India, Avalara Technologies Pvt. Ltd. SEE ALSO: <a href="https://www.businessinsider.in/science/health/news/sii-pauses-oxfords-covid-19-vaccine-human-trials-following-show-cause-notice/articleshow/78036449.cms">Oxford COVID-19 vaccine: SII pauses trials in India following show-cause notice</a> <a href="https://www.businessinsider.in/business/startups/news/zomato-gets-over-100-million-from-tiger-global-valuation-could-hit-3-4-billion/articleshow/78036376.cms">Zomato gets over $100 million from Tiger Global – valuation could hit $3.4 billion</a>

EPFO defers one part of 8.5% interest payment due to COVID-19. Here’s what experts have to say about it

10 best tax-saving investments

New Delhi, Jan 16 () Mutual funds industry body Amfi has requested the government to allow low cost debt-linked saving schemes, with tax benefits, to deepen bond market, and lower holding period in gold and commodity ETFs to one year from existing three years for LTCG purposes.
 In its Budget proposals to the Finance Ministry, the industry body has also demanded that the government recognise mutual funds (MFs) as specified long-term assets, qualifying for Long-Term Capital Gains (LTCG), as well as bring ULIPs of life insurance companies and equity MF schemes on par.
 The mutual fund body has also asked for dividend distribution tax (DDT) exemption for EPFO, NPS and insurance companies investing in MF schemes and pass-through status for income tax purpose to those Category III AIFs which make 65 per cent investments in listed equities.
 "Amfi's suggestions have been in the Budget proposal list for a few years. We are hoping this time our long pending submissions get addressed, which would help take the Indian MF industry not only to the next level of growth but also help in contributing to making economy stronger, especially with deepening of bond market, making long term availability of funds for infrastructure growth, and reducing the fiscal deficit by shifting investments from pure gold to gold ETFs," Amfi Chief Executive N S Venkatesh said.
 Some of the proposals are also aimed at bringing parity with comparable investment avenues and making mutual funds more retail investor friendly, he added.
 The Association of Mutual Funds in India (Amfi) said that mutual funds should be allowed to introduce low-cost, lower-risk tax-exemption-linked debt-linked savings schemes (DLSS) on the lines of equity linked saving schemes (ELSS).
 It further proposed that investments up to Rs 1.5 lakh under DLSS be eligible for tax benefit, subject to a lock in period of 5 years.
 At present, equity-linked savings schemes qualify for tax benefits under Section 80 CCC of the Income Tax Act for an investment limit of up to Rs 1.5 lakh in a fiscal year.
 In order to make gold and commodity ETFs more attractive, the industry body has proposed to lower the holding period for LTCG purposes from 3 years to 1 year, as is the case for listed debt securities.
 Besides, Amfi has requested clarity in respect of creation of segregated portfolio in mutual fund schemes, on capital gains tax treatment upon sale of mutual funds units with regard to the treatment of the units allotted consequent on segregation of portfolio.
 In addition, it has proposed that the threshold limit in equity oriented mutual fund schemes be restored to 50 per cent. Reducing the threshold limit of equities from 65 per cent to 50 per cent for being regarded as 'equity-oriented fund' would encourage more investors with lower risk appetite to invest in such funds.
 Amfi has also proposed that the definition of equity oriented funds be revised to include investment in Fund of Funds schemes, which invest predominantly in units of equity oriented mutual fund schemes. SP 
RVK

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

<ul><li>Employees can now withdraw 75% of the <keyword id="114854" type="ORGANIZATION" weightage="20" keywordseo="Employee-Provident-Fund">Employee Provident Fund</keyword> (<keyword id="45027" type="ORGANIZATION" weightage="20" keywordseo="EPF">EPF</keyword>) if they’ve been unemployed for a month. </li><li>This also means that the EPF account won’t be shut. </li><li>The continuity of the EPF account is crucial for pension and taxation on withdrawals.</li></ul>There have been a number of changes made to the Employee Provident Fund (EPF) over the past couple of years, so many that it is sometimes hard to keep track of. Most recently, however, the big change has been that subscribers can <a href="https://www.newsx.com/business/epfo-allows-members-to-withdraw-funds-for-marriage-house-purchase">withdraw 75% of their EPF balance</a> provided that they’ve been unemployed for at least a month. And, you won’t have to close your account. This is important because according to earlier rules if someone’s been unemployed for more than two months, they could withdraw their entire balance. But, that also meant that they would have to discontinue their account. The account lives on The EPF is the <a href="https://www.bankbazaar.com/tax/all-about-epf.html">culmination</a> of your contribution, your employer’s contribution and interest accrued on that principal amount. So, this measure lets you liquidate your investment like an advance against the principal. Liquidity may be the short-run gain, but in the long-run, the survival of the EPF account is much more significant. As per the rules of the Employee Provident Fund Organisation (EPFO), in order for a subscriber to be <a href="https://www.businesstoday.in/current/economy-politics/epfo-pf-withdrawal-procedure-employer-employee-salary/story/279312.html">eligible</a> for pension, they have to maintain their EPF account for at least 10 years. In case the account shuts down before the stated time period, the process will have to be started all over again with a new account. So since your account won’t be discontinued if you’re withdrawing 75% of your EPF, it will remain eligible for pension. That being said, the continuity of your account is also important for <a href="https://www.bankbazaar.com/saving-schemes/pf-withdrawal-rules.html?ck=Y%2BziX71XnZjIM9ZwEflsyDYlRL7gaN4W0xhuJSr9Iq7aMYwRm2IPACTQB2XBBtGG&amp;rc=1">taxation</a> purposes. Any withdrawals that are made from the EPF account before five years are taxable. But should your account stay intact, the withdrawals are completely <keyword id="880043" type="PERSON" weightage="20" keywordseo="Tax-free">tax-free</keyword> after the first five years. The withdrawal you make if you’ve been unemployed for a month is tax-free in either situation, but the interruption would affect withdrawals for marriage, education, home loans etc. And, it’s not just the interest that’s taxed. It’s the principal amount as well. Overall, the EPFO has taken progressive steps towards evolving the fund for today’s market even though the latest interest of 8.55% is the <a href="https://www.financialexpress.com/money/epfo-alert-modi-government-to-notify-8-55-interest-on-provident-fund-this-week-check-details-here/1157155/">lowest</a> it has witnessed in 5 years. They’ve introduced equity traded funds (ETFs) instead of being limited to fixed income instruments. Reports say that the EPFO may even have plans of letting subscribers <a href="https://economictimes.indiatimes.com/wealth/personal-finance-news/epfo-members-to-get-option-to-hike-investments-in-etfs-by-this-fiscal/articleshow/63815546.cms">choose</a> the amount of money they would want to be put into equity instead of the blanket 15% implemented right now.

You Searched For "EPFO investment in ETF" and got 9 results

EPFO invested Rs 27,105 crore in exchange trade funds in Apr-Oct: Labour Min

PTI

Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

PTI

EPFO's investment in ETFs at Rs Rs 86,966 cr till September

PTI

EPFO might raise ETF investment to 10%

BI India Bureau

EPFO to invest about Rs 410 crore in ETFs every month

BI India Bureau

EPFO defers one part of 8.5% interest payment due to COVID-19. Here’s what experts have to say about it

BI India Bureau

10 best tax-saving investments

Economic Times

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

PTI

Here's why the new EPF rules make good sense in the long-run

Prabhjote Gill

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