EPFO – Employees’ Provident Fund Organisation Offers Safer, More Stable Retirement Returns

 

For subscribers nearing retirement, the organization will invest a greater percentage of their money in safe debt.

Employees’ Provident Fund Organisation (EPFO) subscribers may soon have access to risk-profiled and age-based investment options. As a result, the organisation will invest a higher percentage of young subscribers’ money in equity, while those nearing retirement will put their money in safe debt.

In an ET report, the step is part of the organization’s long-term strategy to expand its portfolio and boost investment returns.

A report added that EPFO has 60 million subscribers with a corpus of Rs 15 trillion. The fund can invest up to 15 percent of its funds in equity through ETFs. These ETFs can be based on the Nifty, Sensex, or Bharat 22 indices.

According to an ET official, investments can be differentiated based on age and risk profile, with younger members receiving more equity investments and elderly members receiving safer investments.

Further, the official said that pension funds can be invested in infrastructure and real estate for a longer period of time.

In an ET report, Saraswathi Kasturirangan, a partner at Deloitte India, was quoted as saying that “This could be a good approach for the pension scheme as it will provide subscribers with the option of flexibility in investing, like the National Pension Scheme, and will make EPFO more competitive.”

Up to March 31, EPFO has redeemed Rs 22,000 crore of its assets and made investments in equities cumulatively, totaling Rs 1.7 trillion. EPFO started investing in equities only in 2015.