EPFO members to get option to hike investments in ETFs
New Delhi: Over five crore subscribers of retirement fund body EPFO will get an option to increase or decrease investments of their provident fund into stocks through exchange trade funds (ETF) in the current financial year.
The Employees' Provident Fund Organisation plans to credit ETF investments in the PF accounts of in about three months, thereafter it would give an option to the subscribers to hike or cut investments in ETFs from their funds.
"We have to develop a software to credit ETFs into the PF accounts of subscribers. It will take 2 to 3 months," EPFO's Central Provident Fund Commissioner V P Joy said.
"Once we do that we would go for next phase to give an option to members to increase or decrease investments in the stocks," he added.
EPFO's apex decision making body, Central Board of Trustees (CBT), had last week decided to explore the possibility of giving an option to subscribers for enhancing equity allocation beyond mandated equity investment limit (presently 15%) as also of reducing it below that limit.
EPFO invests 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.
The CBT had also approved the recommendation of EPFO's advisory body -- Finance Investment and Audit Committee (FIAC) -- that subscribers be allocated equity units only for 15 per cent of their contributions. All units over and above this allocation to all the subscribers would be held by the EPFO.