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The labour ministry has implemented retirement fund body <keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="epfo">EPFO</keyword>'s <keyword id="68581" type="PERSON" weightage="20" keywordseo="Decision">decision</keyword> to restore pension commutation under the Employees' Pension Scheme, a move that will benefit 6.3 lakh pensioners. Pension commutation refers to part-withdrawal of fund in advance by a subscriber, who then gets reduced pension amount for 15 years. With the ministry's latest decision, such pensioners would receive their full pension after completion of 15 years. On February 20, the ministry notified the decision of the <keyword id="351142" type="COMPANY" weightage="20" keywordseo="Employees-Provident-Fund-Organisation">Employees' Provident Fund Organisation</keyword> (EPFO) to restore pension of those who opted for commutation of their pension on or before September 25, 2008. In this regard, the Employees' Pension Scheme -- run by the EPFO -- has been amended. "The normal pension in respect of those members who availed the benefit of commutation of pension under the erstwhile paragraph 12A of this scheme, on or before the 25th day of September, 2008, shall be restored after completion of fifteen years from the date of such commutation," as per the notification. As many as 6.3 lakh pensioners would benefit from the decision. They had opted for commutation of their pension and got a lump sum at the time of retirement from their pension fund on or before September 25, 2008. The provision for pension commutation of pension was withdrawn by the EPFO. Now, the facility has been restored for all those who opted for it on or before September 25, 2008. Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the reduced amount was given in lump sum. After 15 years, pensioners were entitled to get the full pension. In August 2019, the EPFO's apex decision-making body -- <keyword id="5190387" type="COMPANY" weightage="20" keywordseo="Central-Board-of">Central Board of</keyword> Trustees headed by the labour minister -- approved the proposal to restore commutation of pension for 6.3 lakh pensioners who had opted for the benefit. An EPFO panel had recommended for amendment in EPS-95 (Employees' Pension Scheme 1995) for restoration of commuted value of pension to pensioners after 15 years of drawing commutation. Earlier, under EPS-95, members were allowed to commute one-third of their pension for 10 years, which was restored after 15 years. This facility is still available to certain categories of government employees.

6.3 lakh pensioners in India can now withdraw their funds in advance

<ul><li>Spooked by rising debt defaults, the Employee Provident Fund Organisation has decided to play it safe. </li><li>Not just to private companies, the pension fund has decided to turn cautious even while buying bonds of government companies. </li><li>EPFO also decided to exercise its early redemption options and cut down exposure to the debt-ridden DHFL. </li><li>The recent crisis in non-banking financial companies, sparked by the collapse of IL&amp;FS, has led to an acute credit crunch in the Indian economy. </li></ul> The credit crunch in the Indian economy is getting more acute by every passing day. The latest to join the list of risk-averse financial institutions, spooked by the spike in unpaid loans, is the country’s pension fund. The Employees Provident Fund Organisation (EPFO) which is managed by the ministry of labour and employment, today made a landmark decision to stay away from lending to private sector companies. It has decided to turn cautious while lending to state-owned companies as well. “The Central Board of Trustees (CBT) approved the decision to withhold any further investment in Private Sector Companies Bonds and to compulsorily consider one of the two required ratings necessarily from CRISIL, CARE, ICRA and India Ratings for investments in public sector undertakings’ bonds category,” said a press release on the discussions held today. This will be a heavy blow to the company as<a href="https://www.business-standard.com/article/companies/nbfc-crisis-epfo-decides-to-halt-investment-in-private-sector-bonds-119062001418_1.html"> it invests as</a> much as 20-45% of its incremental funds in debt instruments. And the assets of the organization that manages the pensions of hundreds of millions of Indians is at massive ₹8 lakh crore. This is another big setback for the market sentiment which is already saddled by a slew of bad news about the economy. Sensex tumbled by 581 points today (August 22). Twice bitten This decision probably came after its exposure to the non-banking financial companies like IL&amp;FS which defaulted on payments. Though it officially never declared how much it is owed to by the scam-ridden IL&amp;FS,<a href="https://economictimes.indiatimes.com/markets/stocks/news/epfo-writes-to-finance-ministry-on-exposure-in-ilfs-bonds/articleshow/68135800.cms?from=mdr"> </a>the exposure is estimated at ₹570 crore, <a href="https://economictimes.indiatimes.com/markets/stocks/news/epfo-writes-to-finance-ministry-on-exposure-in-ilfs-bonds/articleshow/68135800.cms?from=mdr">as per reports citing sources</a>. While the direct exposure to infrastructure lending giant would be just 0.1% of EPFO’s total investments, the decision to abstain from making fresh loans to corporates may be triggered by the wave of defaults triggered by the collapse of IL&amp;FS. EPFO has exposure to yet another shadow bank DHFL, which is one of the many companies that crumbled under the IL&amp;FS debacle. In today’s meeting, the pension fund decided to exercise its early redemption options to cut down exposure to the housing finance company which is saddling heavy debt. In 2015, the government had announced that the pension fund would invest more and make the most of the ‘world’s fastest growing economy’ tag. The Finance Minister Arun Jaitley had then said <a href="https://economictimes.indiatimes.com/news/economy/policy/labour-ministry-to-notify-pattern-of-epfo-investment-in-equity-soon/articleshow/46761238.cms?from=mdr">in the Budget </a>that EPFO would invest 5% of its funds into equity and equity related schemes. However, as things turned for the worse in the last three years, EPFO joined the list of lenders and investors who prefer keeping cash safe in the banks instead of lending to risky companies. The resulting credit crunch further hamstrung an already sluggish economy.

Indian pension fund says it won’t lend money to private companies

New Delhi, Retirement fund body EPFO on Thursday started crediting 8.5% rate of interest on employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">provident fund</keyword> (EPF) for 2019-20 for its over six crore members, a senior official said. A large number of members of the <keyword id="6423266" type="COMPANY" weightage="20" keywordseo="employees-provident-fund-organisation">Employees Provident Fund Organisation</keyword> (EPFO) would be able to see their updated EPF accounts with credit of 8.5 per cent rate of interest for 2019-20, a senior official told . The official further informed that the <keyword id="126926" type="COMPANY" weightage="20" keywordseo="Labour-Ministry">labour ministry</keyword> has already sent the direction to credit the 8.5% interest on EPF for 2019-20 to the EPFO and the body has already started crediting interest into members account for the last fiscal. Labour Minster <keyword id="258830" type="PERSON" weightage="20" keywordseo="Santosh-Gangwar">Santosh Gangwar</keyword> said, "We had said that it would be our endeavour to provide 8.5% rate of interest on EPF for 2019-20. We have issued a notification to provide 8.5% rate of interest on EPF for 2019-20. We have also began the process to credit the said rate of interest into subscribers account." The minister also said that he has asked to ensure that all those members who are retiring on December 31, must get 8.5% rate of interest (for 2019-20). The process for capital gains for payment of 0.35% interest for 2019-20 has also been completed, he added. "It (8.5% interest) would comprise 8.15% from debt income and balance 0.35% (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020," he said. Earlier in the day, Gangwar had approved the 8.5% rate for last fiscal after receiving the finance ministry's concurrence. Thereafter the direction was sent to the EPFO for crediting the interest on EPF into the subscribers' accounts. In March this year, the EPFO's apex decision making body <keyword id="225704" type="COMPANY" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> headed by Gangwar had approved 8.5% interest rate on EPF for 2019-20. Earlier in September this year, the EPFO had decided to split 8.5% interest into two installments of 8.15% and 0.35% in its trustees meet headed by Gangwar. But later, the ministry decided to credit the entire 8.5% into subscribers' accounts in one go. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-tata-steel-vedanta-adani-green-tata-motors-maruti-mm-dhfl-v-mart-indian-bank-and-others/articleshow/80038635.cms">Top stocks to watch — Tata Steel, Vedanta, Adani Green, Tata Motors, Maruti, M&amp;M, DHFL, V-Mart, Indian Bank, and others</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-the-list-of-upcoming-new-mobiles-in-january-2021-with-expected-price/articleshow/80039794.cms">Upcoming smartphones in India in January 2021</a> <a href="https://www.businessinsider.in/international/news/ten-of-the-most-outrageous-predictions-for-2021-according-to-saxo-bank/slidelist/80040045.cms">From Amazon buying Cyprus to Germany bailing out France — here are ten of the most ‘outrageous’ predictions for 2021</a>

EPFO begins crediting 8.5% interest for six crore people — to reflect in EPF accounts from new year

<ul><li>The Union government is likely to double or even triple the minimum monthly <keyword id="6354432" type="UNKNOWN" weightage="20" keywordseo="Pension">pension</keyword> of retired organised sector employees. </li><li>The recommendation for the same was made by a three-member committee constituted by the labour ministry. </li><li>The central board of EPFO, and the committee are expected to deliberate upon the way to go about the committee’s recommendation on Monday and Tuesday.</li></ul>Pensioners now have one more thing to be happy about besides not having to work through this terrible summer. The Union government is <a href="https://www.livemint.com/Politics/gQ2c7DqE4FL6hiJtE4wCBK/Govt-to-double-minimum-pension-for-organized-sector-employee.html">likely </a>to double or even triple the minimum monthly pension of retired organised sector employees. The recommendation for the same was made by a three-member committee constituted by the labour ministry, three months ago. As per the committee, the existing minimum pension of ₹1,000 per month should be immediately raised to ₹2,000 and further deliberations should be made on the possibility of increasing it upto ₹5,000. A ₹1,000 pension per month means as little as ₹33 per day which, considering the high cost of living, is insufficient even for a rural pensioner. The Union Cabinet had approved ₹1,000 as the minimum pension in 2014 and had later extended it upto 2015. From then onwards, it has never been revised. The issues of pension are undertaken by Employees' Provident Fund Organisation (EPFO) that is the institution that manages social security funds of workers in the (semi) organised sector in <keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword>. All establishments across the country that are ‘organised’ or have 20 or more employees whose basic wages are up to ₹15,000 are covered under the social security schemes run by this institution. Each month, an organised sector employee contributes 12% of his basic salary to EPFO as provident deduction, and the same amount is contributed by the employer. From the employer’s contribution,<a href="https://economictimes.indiatimes.com/news/economy/policy/epfo-nod-likely-soon-for-minimum-rs-2k-eps-pension/articleshow/64724411.cms"> 8.33%</a> goes to employees’ pension scheme and the rest to the provident fund. The central board of EPFO and the committee are expected to deliberate on the way to go about with the committee’s recommendation over Monday and Tuesday. Though the decision is not final yet, the committee is strongly in favour of it. Ravi Wig, who is also a central board member of the EPFO, is hopeful that the labour ministry will stand in their favour since the previous additional secretary heading the committee has been promoted as the position of a secretary in the labour and employment ministry. Of the six million pensioners that fall under the <a href="https://epfindia.gov.in/site_docs/PDFs/Downloads_PDFs/EPS95_update102008.pdf">Employee’s Pension Scheme (1995)</a>, about four million get less than ₹1,500 per month while the government boasts of three trillion in its pension funds. Considering these figures, if the minimum pension is even doubled, it would help lakhs of pensioners, but it will also add <a href="https://www.businesstoday.in/current/economy-politics/minimum-pension-under-employees-pension-scheme-likely-to-be-doubled/story/279522.html">₹30 billion </a>to the government budget, annually.

Perks of the trade: India may double or triple minimum monthly pension

Real-estate company <keyword id="6361138" type="CITY" weightage="20" keywordseo="Unitech">Unitech</keyword> is under the scanner as some of the employees have claimed that the company did not paid their remuneration on time. Not just this, but the employees also cite that they are facing delays in depositing deducted tax and provident funds. 
 
If reports are to be believed, the real-estate firm has defaulted over its repayments to individuals who had subscribed to its fixed deposit scheme. The allegations have emerged as a result of a delay in the delivery of projects. 
 
"The projects are massively delayed, employees are not getting paid on time and worst of all is the company's attitude. The salary has been delayed as much as six months in some cases. I was paid the September 2014 salary in April 2015," a Unitech employee informed ET, on condition of anonymity. 
 <keyword id="6418194" type="PERSON" weightage="20" keywordseo="Ajay-Chandra">Ajay Chandra</keyword>, MD Unitech, in a defensive mode had said, "In most SPVs (<keyword id="732527" type="ORGANIZATION" weightage="20" keywordseo="Special-Purpose-Vehicles">special purpose vehicles</keyword>), we have paid salaries on time in the last six months." Chandar also said that in such cases, the firm has addressed the issue very seriously. 
 
While talking on the reason of the delay, he said, were cash flow issues. "Wage bill and overall expense was much more than we could service at a point of time when we had 12,000-15,000 people working," he said. 
 The employees cited earlier further told ET that things have turned much worse than the company cared to admit. They said the <keyword id="393468" type="ORGANIZATION" weightage="20" keywordseo="Employee-Provident-Fund-Organisation">Employee Provident Fund Organisation</keyword> (<keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="EPFO">EPFO</keyword>) had also lodged an FIR against the developer for not depositing PF despite deducting it from salaries of employees. However, any copy of FIR didn’t come up and ET could not ascertain this with EPFO separately. 
 
Recruits who left the struggling firm in December 2014 said they foresaw these issues 12 months before they decided to quit. "We are not able to pay I-T returns and people who proceeded on their own got notices from the I-T department. People who left three years ago are yet to get full and final settlement," said a former employee.

This real-estate firm has not paid its employees in the last six months

Aimed at ensuring basic rights and better conditions for about 3 crore people in the <a href="http://www.businessinsider.in/searchresult.cms?query=unorganized+sector">unorganized sector</a>, the government might come up with a proposal to make it incumbent on households to hire domestic workers through a placement agency. 
 
The new rule might include paid leave and other benefits for those people. If new rules got implemented, the violators could find themselves in a lot of trouble, reported the Economic Times. 
 
Other key elements of the proposal include proper accommodation. 
 
Moreover, if anyone would be hired outside the placement system, he or she would be treated as bonded labour and employers would be penalised accordingly. 
 
The <a href="http://www.businessinsider.in/searchresult.cms?query=Ministry+of+Labour+">Ministry of Labour</a> would soon move a Cabinet note on a national policy for domestic workers. This idea was first mooted by the <keyword id="83449" type="ORGANIZATION" weightage="80" keywordseo="United-Progressive-Alliance">United Progressive Alliance</keyword> (<a href="http://www.businessinsider.in/searchresult.cms?query=UPA">UPA</a>) government in 2007. 
 
A senior official told the financial daily that the rules if implemented will make the employer liable to pay for the worker's social security apart from one month of paid annual leave, two months of paid <a href="http://www.businessinsider.in/searchresult.cms?query=maternity+leave+">maternity leave</a> and a weekly off. 
 
"For the first time, we would have a rights-based policy for <a href="http://www.businessinsider.in/searchresult.cms?query=domestic+workers+">domestic workers</a> in the country. It will be a game changer and would help in formalisation of the country's growing workforce," said the official. 
 
As per the proposal, employees and employers will have to sign a contract that lists standard practices which both sides will have to abide by. "The placement agencies involved will be the third party to the agreement besides two representatives from trade unions to ensure that the employee is not denied of his or her basic rights," he said. 
 The draft agreement, which is being finalised and could be taken up for stakeholder consultation in two weeks, has proposed that the employer will have to mandatorily contribute to the <keyword id="686752" type="ORGANIZATION" weightage="60" keywordseo="Employee-State-Insurance-Corporation">Employee State Insurance Corporation</keyword> and the <a href="http://www.businessinsider.in/searchresult.cms?query=Employee+Provident+Fund+Organisation+">Employee Provident Fund Organisation</a> (<keyword id="6372438" type="ORGANIZATION" weightage="100" keywordseo="EPFO">EPFO</keyword>) to ensure medical and life coverage to the employee. 
 
(Image: Indiatimes)

Placement agencies will help hire domestic help soon

Employees Provident Funds Universal Account Number (<keyword id="2407788" type="UNKNOWN" weightage="100" keywordseo="UAN">UAN</keyword>), launched by Prime Minister <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword> in October last year, has been made mandatory for all employees covered under the Employees Provident Funds and Miscellaneous Provisions Act 1952, by an order notified by Retirement fund body <keyword id="6372438" type="ORGANIZATION" weightage="100" keywordseo="EPFO">EPFO</keyword> on Monday. The step was taken for availing of benefit of the scheme. "We have notified the draft order to make UAN compulsory for all organisations covered under the EPF &amp; MP Act," EPFO's <keyword id="6567698" type="ORGANIZATION" weightage="40" keywordseo="Central-Provident-Fund">Central Provident Fund</keyword> Commissioner K K Jalan told PTI. 

	The UAN remains portable throughout the lifetime of an employee and they don't have to apply for PF transfer claims at changing jobs. 
 

	It is even more beneficial for workers in the construction sector, who often change their contractor after short span of time and take up new jobs after fining one contract. 
 
 

	"The deadline for completing the formalities is August 25 after which action will be taken under the powers given to us by the Employees Provident Funds Scheme, 1952, and other applicable laws for failure to comply with the order," Jalan had said after meeting around 150 employers in Bengaluru last week as per media reports. 
 
 The Employees' <keyword id="122254" type="ORGANIZATION" weightage="60" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword> (EPFO) had issued over four crore UANs to employers across the country in July last year. 

	These UANs were then provided to workers and the process of seeding these accounts with KYC details like PAN, Bank Account and Aadhaar started. 
 

	As on today, as many as 56.34 lakh workers have activated their portable PF account numbers. All subscribers have to activate their UAN themselves by logging into the account. 
 

	After the due process, as many as 2.8 crore UANs are ready for activation but these many account holders have not provided their bank account details as per the EPFO website. 
 

	According to information available, there are additional 1.71 crore UANs which were made ready for activation by subscribers who had provided banks accounts details. 
 

	The bank account details are necessary for using UAN for various claims including PF withdrawals. However, those subscribers who have UAN but not provided bank account details can activate their UAN and access it online.

	 
	 
	(image credits: goodreturns)

UAN mandatory to avail benefit of the scheme

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

Relief for those who wanted to draw out their premature <keyword id="45028" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund">provident fund</keyword> (PF) withdrawals of Rs 30,000 or more as the <keyword id="47209" type="ORGANIZATION" weightage="80" keywordseo="Finance-Ministry">finance ministry</keyword> is reconsidering its Budget provision to tax such withdrawals, even as the 2015 Finance Act has been notified and deduction of tax at source from PF accounts settled before five years of service, comes into force from June 1. 
 

	The finance ministry might issue a directive to put the implementation of this clause in the Finance Act on hold or raise the Rs 30,000 trigger for tax deductions from PF accounts, a senior official said. "The government is mulling two options to hold back the implementation of this tax, after the PF office pointed out that it would be unfair to tax retirement <keyword id="25450" type="UNKNOWN" weightage="60" keywordseo="savings">savings</keyword> of people whose income is less than the personal <keyword id="6354751" type="COMPANY" weightage="80" keywordseo="Income-Tax">income tax</keyword> threshold of Rs 2.5 lakh," the senior official told the Economic Times. 
	 

	Meanwhile, the PF department has ordered all offices to be ready to deduct tax from all premature PF claims settled from June 1 as the decision is expected by the end of this month. 
	 

	"Tax will be deducted at 10% if members submit their PAN card details and at the maximum marginal tax rate of 34.608% if a member fails to submit PAN. Only in cases where a member submits Form 15G or 15H, no tax will be deducted," the official said. 
	 

	Form 15G is a self-declaration document for individuals having non-taxable income, while Form 15H is a similar declaration by senior citizens (over the age of 60 years). However, these forms won't be accepted as a valid defense for avoiding tax deductions in case of PF accounts with balances of Rs 2.5 lakh (for those with no taxable income) and Rs 3 lakh for retirees. According to the Employees' <keyword id="122254" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword> (<keyword id="6372438" type="ORGANIZATION" weightage="80" keywordseo="EPFO">EPFO</keyword>), no tax will be deducted if the PF savings are transferred to another PF account. 
	 

	Moreover, no tax would be deducted on their PF withdrawals in special cases. If an employee had to leave service due to bad health or other factors beyond their control such as a slowdown or shutting down of the employer's business, no tax will be deducted. 
	 

	Personal income tax is payable for those earning Rs 2.5 lakh or more annually. An EPF account is mandatory for all employees earning up to Rs 15,000 per month in companies having over 20 workers. As per the law, 24% of an employee's salary is diverted to her or his PF account. 
	 
	(Image: Indiatimes)

Relax! The govt won't tax you just yet for withdrawing your PF before 5 yrs

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

Welcome to the wonderful world of <a href="http://www.businessinsider.in/JACK-BOGLE-An-Elegantly-Simple-Formula-Shows-Why-Passive-Investing-Will-Earn-Higher-Returns-Than-Active-Investing/articleshow/22086333.cms">investments</a>! 
 1. Nominate, Nominate, Nominate: It's presumed that you have an investible surplus either in the form of cash lying idle in the bank account, via salary payments, or you’ve come into money. Either way, the first thing to do is to ensure that you have a nominee in place in your bank account, <keyword id="35450" type="COMPANY" weightage="100" keywordseo="insurance">insurance</keyword> policy, trading-cum-demat account, <keyword id="114854" type="ORGANIZATION" weightage="100" keywordseo="Employee-Provident-Fund">Employee Provident Fund</keyword> account (with your employer) and the Public Provident <a href="http://www.businessinsider.in/Which-One-Is-Better-InvestmentIn-Mutual-Funds-Or-Direct-Investment-Into-Stocks/articleshow/27116001.cms">Fund</a> (with the government). 
 
You may or may not have all of these <a href="http://www.businessinsider.in/If-youve-made-your-first-Mutual-Fund-investment-here-is-what-you-should-do-next/articleshow/47176866.cms">investment</a> avenues, but the ones that you have require a nominee and its best to review the nominee’s name once you get married and later, have a child. Better still, make a will. 
 
2.Pay-Off Debt: You should be assuming as little debt as possible, and <a href="http://www.businessinsider.in/Mortgage-Protection-6-ways-to-come-out-of-a-loan-trap/articleshow/47097827.cms">paying off</a> outstanding credit card bills is of paramount importance. The amount of penal interest that credit card companies charge puts even seasoned money lenders to shame. Have NIL outstanding balance on your credit card. 
 3.Get Term Insurance: If you have dependents, then do ensure that they have at least two years’ worth of expenses to pay for in case something untoward happens to you. Calculate 24 months’ worth of expenses, add 20 percent to them and get a term cover for that amount. Keep adding to your term cover every two years as both your salary and certainly your expenses rise each year. Remember not to confuse insurance with investment. If your advisor tries to lure you into a ULIP or a monthly <keyword id="35471" type="ORGANIZATION" weightage="100" keywordseo="SIP">SIP</keyword>, from an insurance company, masquerading as a Life cover, then you should abandon that advisor immediately. 
 
4.Get Medical Insurance: In addition to the one that your employer offers. Often, people leave an organization in a huff, only to 
realise that they and their family are bereft of any medical <a href="http://www.businessinsider.in/6-pre-marriage-financial-decisions-everyone-should-take-before-saying-I-Do/articleshow/47865034.cms">insurance</a>. The same happens when there are sudden job losses announced by companies. Hence, it is always best to have a parallel medical insurance paid for by yourself. In any case you get a tax benefit in your annual <keyword id="6354751" type="COMPANY" weightage="100" keywordseo="Income-Tax">income tax</keyword> returns. 
 
In addition, keep money worth 5-6 months of expenses in a money market liquid fund so that if you have an unforeseen run-in with your boss, or you decide to go your own way then at least half-year’s worth of expenses are arranged for. Welcome to investing now that most risks are taken care of. 
 5.Public Provident Fund: The government pays you 8.5 percent compounded interest on your PPF <keyword id="6362476" type="ORGANIZATION" weightage="100" keywordseo="investments">investments</keyword>. They also help you save tax. Investments worth 100,000 rupees a year are allowed. These funds are locked in for at least five years and the government allows only a certain amount of money to be withdrawn from the account as it is meant for your old age, when income will dwindle but expenses will keep on rising. 
 There is a lot of debate among <keyword id="143983" type="POSITION" weightage="100" keywordseo="investment-advisors">investment advisors</keyword> whether PPF should be maintained or not considering that the rate of interest often falls below the rate of <keyword id="22195" type="COMPANY" weightage="100" keywordseo="Inflation">inflation</keyword>. However, its best to have some sort of fixed interest bearing income in your investment portfolio and this should be encouraged. 
 
6.Equity Funds: Just run a simple monthly Systematic Investment Plan into a well-diversified equity fund at the start of your professional life. Increase the SIP by 5-10 percent each year as that is what your average annual increment will be. And don’t look at that money till you retire. The best time to start your SIP is today! Do not go into sector specific funds, no matter what your broker tells you. 
 
7. Buying a House: If you can afford one, certainly do so. But do not invest into multiple homes across many cities. It’s a waste of investible surplus, its tax-inefficient, it is relatively ill-liquid and the average returns via rentals over years are much below those earned from equities. 
 
Lots of people feel investing is a very difficult thing to master and hence, prefer to keep money in fixed deposits. While FDs ensure that your capital remains protected, the returns via interest income are taxed, beyond a certain amount of interest earned, and in any case the rate of interest is below inflation rate. It’s a non-efficient way of utilising your money. 
 
If you take these 7 steps then you are cruising on the investment highway! 
 
(Image credits: Indiatimes)

Top 7 things to do as you start to invest

Around 8.2 lakh members of retirement fund body <keyword id="6372438" type="PERSON" weightage="20" keywordseo="epfo">EPFO</keyword> and private PF trusts have dipped into their savings and withdrew ₹3,243.17 crore to sustain in the lockdown imposed by the government to contain COVID-19. Earlier last month on March 28, the <keyword id="6423266" type="COMPANY" weightage="20" keywordseo="employees-provident-fund-organisation">Employees Provident Fund Organisation</keyword> (EPFO) had allowed formal sector workers under its ambit to withdraw a non-refundable advance from their <keyword id="415826" type="PERSON" weightage="20" keywordseo="retirement-savings">retirement savings</keyword> to deal with hardships due to lockdown. "EPFO under <keyword id="602690" type="COMPANY" weightage="20" keywordseo="Union-ministry-of-labour">Union Ministry of Labour</keyword> &amp; Employment, has settled a total of 12.91 lakhs claims, including 7.40 lakhs COVID-19 claims under Pradhan Mantri Garib Kalyan Yojana (PMGKY) package," a Labour Ministry statement said. Claims settlement involves disbursal of total amount of ₹4,684.52 crore which includes ₹2,367.65 crore COVID claims under the PMGKY package. The exempted private PF trusts have also risen to the occasion amidst the COVID-19 pandemic, the ministry said. As on April 27, 2020, ₹875.52 crore have been disbursed to 79,743 PF members as advance for COVID-19 by the exempted PF Trusts under this scheme, with 222 private sector establishments disbursing ₹338.23 crore to 54,641 beneficiaries, 76 public sector establishments disbursing ₹524.75 crores to 24,178 beneficiaries and 23 cooperative sector establishments disbursing ₹12.54 crores to 924 claimants, it said. Private PF trusts manage their employees' PF money and account themselves. They are exempted to file monthly PF return and thus also called exempted establishments. Tata Consultancy Services Mumbai, HCL Technologies Ltd. Gurugram and HDFC Bank Powai, Mumbai are the top three exempted establishments in the private sector, both in terms of number of claims settled and amount disbursed, it said. In public sector, ONGC Dehradun, Neyveli Lignite Corporation Neyveli and BHEL Trichy are the top three exempted establishments to have settled maximum number of COVID-19 advance claims; whereas, Neyveli Lignite Corporation Neyveli, ONGC Dehradun and Vishakhapatnam Steel Plant Vishakhapatnam are top three establishments in terms of amount disbursed to EPF members, it said. The provision for a special withdrawal from the EPF Scheme to fight COVID-19 pandemic is part of the PMGKY scheme announced by the government and an urgent notification on the matter was made to introduce a para 68 L (3) of the EPF Scheme on 28th March, 2020. Under this provision non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75 per cent of the amount standing to member's credit in the EPF account, whichever is less, is provided. Despite only one-third staff being able to work due to lockdown, EPFO is committed to serve its members during this difficult situation and EPFO offices are functional to help them during these testing times, it said. See also: <a href="https://www.businessinsider.in/india/news/a-checklist-of-steps-offices-should-take-as-they-reopen-after-lockdown-to-avoid-another-wave-of-covid-19-infections/articleshow/75421144.cms">A checklist of steps offices should take, as they reopen after lockdown, to avoid another wave of COVID-19 infections</a> <a href="https://www.businessinsider.in/india/news/covid-19-combat-retired-maha-teacher-gives-pension-to-cm-fund/articleshow/75123266.cms">COVID-19 combat: Retired Maha teacher gives pension to CM fund</a> <a href="https://www.businessinsider.in/business/corporates/news/reliance-industries-shareholders-may-get-dividend-payout-as-it-to-considers-rights-issue-at-april-30-board-meeting/articleshow/75422405.cms">Reliance Industries shareholders may get dividend payout as it to considers rights issue at April 30 board meeting</a>

Workers have withdrawn over ₹3,200 crore from their retirement savings to survive the Coronavirus lockdown

<ul><li>The Indian government is planning to relax the employee contribution to Employees Provident Fund which will increase <keyword id="8029702" type="UNKNOWN" weightage="20" keywordseo="Take-home-salaries">take home salaries</keyword>. </li><li>As of now, both the employers and the employees each contribute 12% of the salary to the Employee Provident Fund Organisation</li><li>The government aims to lower the mandatory 12% by employees towards <keyword id="45027" type="ORGANIZATION" weightage="20" keywordseo="EPF">EPF</keyword>.</li></ul>The Indian government might be paving the way for higher takehome salaries by reducing the amount that has to be deposited with the Employees Provident Fund, <a href="https://www.business-standard.com/article/economy-policy/take-home-salary-may-rise-under-new-employees-provident-fund-law-119082700033_1.html">reported Business Standard.</a> As per a proposal, the government will decrease the rate of contribution for a specific class of workers<a href="https://economictimes.indiatimes.com/news/economy/policy/domestic-help-others-may-get-pf-benefits/articleshow/70848979.cms"> like domestic help, drivers, maids and other self employed workers. </a>However, the law does not suggest any change in the contribution of the employer's. Currently, all the employees who are earning upto ₹15,000 a month have to pay 24% of their salary. As of now, both the employers and the employees contribute 12% of the salary to the Employee Provident Fund Organisation. The government aims to relax the mandatory 12% contribution by the employee. Along with this, the government also wants to give employees an option to choose between all the schemes provided by the Employees Provident Fund Organisation (<keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="epfo">EPFO</keyword>) and the National Pension System (NPS). If approved, an employee who is not satisfied with NPS can make a switch to EPFO. A first draft of the EPF &amp; MP (Amendment) Bill, 2019, has sought comments from stakeholders till September 22.

You Searched For "Employees Provident Fund Organisation" and got 13 results

6.3 lakh pensioners in India can now withdraw their funds in advance

PTI

Indian pension fund says it won’t lend money to private companies

Katya Naidu

EPFO begins crediting 8.5% interest for six crore people — to reflect in EPF accounts from new year

PTI

Perks of the trade: India may double or triple minimum monthly pension

BI India Bureau

This real-estate firm has not paid its employees in the last six months

BI India Bureau

Placement agencies will help hire domestic help soon

BI India Bureau

UAN mandatory to avail benefit of the scheme

BI India Bureau

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

PTI

Relax! The govt won't tax you just yet for withdrawing your PF before 5 yrs

BI India Bureau

EPFO to invest about Rs 410 crore in ETFs every month

BI India Bureau

Top 7 things to do as you start to invest

Shailendra Bhatnagar

Workers have withdrawn over ₹3,200 crore from their retirement savings to survive the Coronavirus lockdown

PTI

Take home salaries in India may rise at the cost of employee provident fund

Preeti Soni

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