Hr NewsStatutory Compliance

EPFO has invested over Rs 9,000 crore in ETFs

Source | The Economic Times

HYDERABAD: Union Labour Minister Bandaru Dattatreya today said that the Employees Provident Fund Organisation (EPFO) has invested over Rs 9,000 crore in Exchange Traded Funds (ETF) till September 30 this year with a Return on Investment of 9.43 per cent.

Dattatreya also said that his Ministry is rethinking the proposal to amend the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952, to bring down the threshold limit for coverage of firms with employee strength below 20 under the EPF.

“We have invested Rs 9,148 crore till September 30 this year. The market value as on that date stood at Rs 10,003 crore, giving us an RoI of 9.34 per cent. We have decided to invest up to Rs 13,000 crore during the current financial year. That is about 10 per cent of the investable amount for the year,” Dattatreya told PTI.

The Finance Ministry had last year notified a new investment pattern for EPFO, allowing the body to invest a minimum of 5 per cent and up to 15 per cent of its funds in equity or equity-related schemes.

The EPFO had started investing up to 5 per cent of its investable deposits in ETFs in August 2015.

EPFO’s investable deposits (annual) is around Rs 1.30 lakh crore and it manages a corpus of about Rs 8 lakh crore.

Government has entrusted the task of managing the EPFO’s investments in ETFs to SBI Mutual Fund and UTI Mutual Fund.

“We proposed to amend the Act to bring firms with 10 employees under the EPFO coverage. But we have decided to rethink on it. The committee of Ministers (Five cabinet Ministers including Finance Minister Arun Jaitley) on this subject has decided to discuss it once again. We are yet to make a decision on this issue.

“We will discuss the impact on the smaller firms if made a law. Social security cover is very important for workers,” Dattatreya said.

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