Employees’ Provident Fund Organisation to stay away at present from new investment pattern that mandates at least a 5 pct exposure to equities.
The Employees’ Provident Fund Organisation (EPFO) has decided to stay away at present from the new investment pattern of the finance ministry that mandates at least a five per cent exposure to equities.
The decision was taken at a meeting of the EPFO’s Central Board of Trustees on Wednesday which has recommended further examination of the norms.
“The CBT has recommended that the issue should be legally examined by the EPFO as to whether the finance ministry guidelines are binding and whether the investment in equity can be made in view of the EPF scheme provisions that are based on the Indian Trusts Act,” said Central Provident Fund Commissioner KK Jalan after the meeting, adding that the issue after examination would be put before the Finance and Investment Committee of the EPFO that decides on investment issues.
The new investment pattern that was notified by the finance ministry on March 2 and will be effective from April 1 mandates up to 50 per cent investment in government securities, up to 45 per cent in debt securities and up to 15 per cent in equity instruments.
Meanwhile, the CBT in its meeting also approved a proposal that would allow subscribers of the Employees’ Pension Scheme to continue to contribute till the age of 60 from the current limit of 58 years. In turn they would be given a bonus of 8 per cent on their applicable pension.
Labour minister Bandaru Dattatreya also announced that the EPFO will also work on proposals to set up a Workers’ Bank as well as provide housing to all subscribers of the scheme.