“The Central Board of Trustees (CBT), Employees Provident Fund (EPF) has approved investment of only 5 per cent in ETFs. At present, there is no proposal under consideration of the government to enhance this limit,” Labour Minister Bandaru Dattatreya said in a written reply to Lok Sabha. As on 30 June, the total amount invested by EPFO in ETFs is Rs 7,468 crore and the absolute return on the investment so far is 7.45 per cent.
Separately, the minister had earlier said: “There will be a CBT meeting before July 22. We may take a decision on the quantum of investments to be made in ETF. We are in discussions with Bombay and National Stock Exchanges also. The investment will certainly increase (over last year). “The Finance Ministry gave us clearance to invest from 5 to 15 per cent. It is a long term investment. It may be up to 10 to 12 per cent depending upon the market conditions. We expect the markets would be stabilised in the long run. Markets also need money.”
EPFO had started investing ETFs in August last year. Trade Unions have been opposing the decision of the EPFO to invest ETFs in view of volatility in the stock markets.
The minister told the House that as per the pattern of Investment notified by Ministry of Labour & Employment on April 23, 2015, investment in equity and related investments is permitted from 5 to 15 per cent.
Meanwhile, government has released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) for 2015-16. Under the scheme, individuals who have registered before March 31, 2016, will get a co-contribution from the government, which will be 50 per cent of the subscriber contribution up to a maximum of Rs 1,000. The co-contribution will be for 5 years from 2015-16 to 2019-20.
“Government of India through PFRDA has released co-contribution for 2015-16 for 16.96 lakh eligible APY subscribers amounting to Rs 99.57 crore,” a finance ministry statement said.
It said subscribers who have any pending contributions in their APY accounts till March 2016 won’t be paid with co-contribution. “They have been advised by PFRDA to regularise their APY accounts so as to get the Government of India co-contribution in September,” it added. PFRDA is the pension fund regulator. Government’s co-contribution is payable only when accounts are regular and the admissible co-contribution is paid into the savings bank account of the subscribers.
The government is implementing Atal Pension Yojana (APY) through banks and the Department of Post. The total number of subscribers registered under APY as on June 30, 2016, has crossed 30 lakh and every day, nearly 5,000 new subscribers are added, the statement said.
Only those users who are not income tax payers and not part of any other social security schemes are eligible for the central government co-contribution. APY provides minimum guaranteed pension ranging between Rs 1,000 to Rs 5,000 per month for the subscriber from the age of 60 years. The same amount of pension is paid to the spouse in the case of the subscriber’s demise.