LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » Personal Finance News

EPFO moots raising equity investment limit to 25%

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
EPFO moots raising equity investment limit to 25%
It has been 17 months since 7th pay commission recommendations were announced by Finance Minister Arun Jaitley in Parliament on July 19, 2016. Image source: PTI
Written By: ZeeBiz WebTeam
Updated: Fri, Feb 16, 2018
11:38 am
ZeeBiz WebDesk
RELATED NEWS
Good news for six crore EPFO members! check how much your Provident Fund (PF) will grow after EPF interest rate for FY21 announced Good news for six crore EPFO members! check how much your Provident Fund (PF) will grow after EPF interest rate for FY21 announced
EPF interest rate 2020-21: ANNOUNCED! Check latest PF news update on EPFO provident fund deposits EPF interest rate 2020-21: ANNOUNCED! Check latest PF news update on EPFO provident fund deposits
EPFO interest rate today: Retirement fund body likely to make announcement on EPF deposits' interest rate for FY 21 EPFO interest rate today: Retirement fund body likely to make announcement on EPF deposits' interest rate for FY 21
7th Pay Commission latest news: REVEALED! Salary may be affected by New Wage Code - know details 7th Pay Commission latest news: REVEALED! Salary may be affected by New Wage Code - know details
EPFO members alert! Want to change mobile number in EPF passbook online; do this at epfindia.gov.in EPFO members alert! Want to change mobile number in EPF passbook online; do this at epfindia.gov.in

Up to a fourth of your contribution to the employees’ provident fund (EPF) may go into equities if a plan being considered by the country’s retirement fund manager bears fruit, reports Livemint.
 
Currently, the Employees Provident Fund Organisation (EPFO) invests 15% of contributions in equities and the rest in debt.
 
People aware of the matter told Livemint that EPFO is considering allowing employees with higher salaries to route 25% of their PF contribution into stocks while retaining the 15% cap for low-income employees.
 
“We have discussed the proposal a couple of times in recent months. In the next finance and investment advisory committee meeting, the issue will be taken up again,” Prabhakar Banasure, a member of the committee told Livemint, adding “The choice is a logical requirement in investment decisions.”
 
According to the report, if the proposal takes effect, this will be a departure from the EPFO’s one-size-fits-all policy for investing retirement savings of millions of subscribers.
 
The report also says that the rethink comes as provident fund subscribers are seeking better returns even as returns from debt investments remain low. The move, if it goes through, will also help EPFO take on competition from the National Pension System, which allows subscribers to invest up to 50% of their savings in equities.
 
EPFO started investing in equity through exchange-traded funds from August 2015. It started by investing 5% of contributions and has since raised it to 15%. The rest go into debt market instruments such as government securities, private sector bonds, and bank fixed deposits.
 
EPFO has annual accruals of over Rs1.2 trillion and has total assets under management worth Rs11 trillion.
 
Of its 50 million active subscribers, official estimates suggest that around 75% earn up to Rs 15,000 a month. But it’s the rest who contribute the bulk of the retirement fund manager’s annual savings corpus.
 
As per the report, as of January 2018, EPFO has an equity exposure of Rs 44,000 crore. Greater equity exposure may also mean more domestic funds in the stock market, a sweetener for a market which is already on a high for the past couple of years.
 
Every month, EPFO subscribers contribute 12% of their basic salary as a mandatory EPF contribution to build a retirement corpus, with a matching 12% contributed by employers.
 
“Debt market, going forward, may not give us the best returns and increasing equity exposure may help beat the shortfall. A well-earning subscriber thinks of creating a retirement corpus which will offer a better inflation-adjusted return in the long term; here, 25% exposure could be a good starting point,” a person aware of the matter told Livemint.
 
“The low-income employees may continue to invest 15% in stocks and the rest in debt and continue to get a stable assured return without taking a risk. With time, EPFO needs to evolve as an asset manager,” he added.
 

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
EPFONational Pension SystemGreater equity exposureStock MarketEquities
RELATED NEWS
Good news for six crore EPFO members! check how much your Provident Fund (PF) will grow after EPF interest rate for FY21 announced Good news for six crore EPFO members! check how much your Provident Fund (PF) will grow after EPF interest rate for FY21 announced
EPF interest rate 2020-21: ANNOUNCED! Check latest PF news update on EPFO provident fund deposits EPF interest rate 2020-21: ANNOUNCED! Check latest PF news update on EPFO provident fund deposits
EPFO interest rate today: Retirement fund body likely to make announcement on EPF deposits' interest rate for FY 21 EPFO interest rate today: Retirement fund body likely to make announcement on EPF deposits' interest rate for FY 21
7th Pay Commission latest news: REVEALED! Salary may be affected by New Wage Code - know details 7th Pay Commission latest news: REVEALED! Salary may be affected by New Wage Code - know details
EPFO members alert! Want to change mobile number in EPF passbook online; do this at epfindia.gov.in EPFO members alert! Want to change mobile number in EPF passbook online; do this at epfindia.gov.in

LATEST NEWS

Anil Singhvi’s Strategy March 5: Make or break levels at Nifty is 14,900-14,925 & Bank Nifty is 35,100-35,125

7th Pay Commission latest news: REVEALED! Salary may be affected by New Wage Code - know details

HDFC home loan interest rate today: New rate comes into effect today; SBI, Kotak also offering chance to buy homes at affordable rates

HDFC Asset Management Company and Nippon Life India Asset Management: PhillipCapital highlights details for Investors

Rakesh Jhunjhunwala picked Tata Motors for his portfolio during Covid Pandemic II Reasons Highlighted

Louise Redknapp felt ''lonely'', ''unimportant'' during marriage

Biden congratulates team NASA, says Indian Americans are ''taking over the country''

Reliance urges employees, family members to register for COVID-19 vaccination, to bear all costs

New Zealanders take to the hills as powerful quakes trigger tsunami waves

Fatima Sana Shaikh to star in Hindi remake of Tamil hit ''Aruvi''

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved