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Equity investment limit for EPFO may be raised to 25 per cent

Source | https://economictimes.indiatimes.com

NEW DELHI: A greater proportion of provident fund savings could be headed for the stock market with shares rising to successive records in past weeks, said a government official.

Such a move could more than double the provident fund money invested in exchange-traded funds (ETFs) over time.

The government is considering a plan to raise the equity investment limit for the Employees’ Provident Fund Organisation (EPFO) to 25% from 15%.

The move follows the higher than-expected return on equity while that on debt has been falling, compelling the government to explore wider investment options to maximise returns.

The return on equity exceeds 13.5% while that on debt is 8.5%. That compares with the EPFO payout for FY17 pegged at 8.65%.

Equity investment limit for EPFO may be raised to 25 per cent

The move could lift EPFO’s annual equity allocation to as much as Rs 50,000 crore over time, if the proposal is accepted.

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