EPFO to set up panel to moot changes in investment pattern

New Delhi : Retirement fund body Employees Provident Fund Organisation (EPFO’s) trustees decided to constitute a panel to look into various investment options like increasing exposure to housing finance firms and private sector bonds. The Central Board of Trustees’ (CBT) also took a slew of other decisions that will enable EPFO to park in fund as fixed deposits in 12 more banks, extend minimum monthly pension of Rs 1,000 beyond current fiscal, besides nominating SBI as its fund manager for three years.

The trustees also decided to set up a separate panel, comprising two representatives each of employers and employees, that will look into facilitating low-cost housing loans to subscribers.  The proposal to invest a part of EPFO funds in equities, however, did not come up for Central Board of Trustees’ (CBT) consideration in its meeting.  EPFO’s apex decision making body CBT is headed by Labour Minister Bandaru Dattatreya. When asked about CBT decisions on relaxing investment norms to maximise returns on investments by the Employees’ Provident Fund Organisation’s (EPFO), the Minister told reporters: “An expert committee to look into this issue.”

The CBT decided to set up a panel after examining a proposal to relax norms for increasing exposure in housing finance firms and to increase limit for investment in private sector bonds from existing 10 per cent to 15 per cent of the corpus. The trustees were of the view that there is need for of an in-depth analysis of various investment options.   The PMO had earlier suggested that EPFO should deploy 15 per cent of funds as loan for low-cost housing as it would generate a credit flow of Rs 70,000 crore.    The initiative is expected to create 3.5 lakh additional low-cost houses.

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