Amid considerations raised by staff’ representatives and noting the necessity for additional deliberations, the EPFO didn’t take up the proposal to hike the cap for investments linked to fairness from 15 per cent of the incremental flows to twenty per cent on the 231st assembly of its Central Board of Trustees (CBT) held Friday-Saturday.
Among different selections, the Employees’ Provident Fund Organisation (EPFO) launched a face authentication facility to permit its 72 lakh pensioners to submit digital life certificates from any location.
Labour and Employment Minister Bhupender Yadav — who chairs EPFO’s CBT — launched the face authentication expertise for pensioners, which is able to permit aged pensioners who face difficulties in getting their biometrics (fingerprint and iris) captured as a consequence of previous age, to go for face authentication whereas submitting the life certificates.
The agenda for the CBT assembly had listed the proposal to hike the funding restrict for fairness however it was then withdrawn, an staff’ consultant mentioned. “The proposal was listed in the agenda but was withdrawn later. Employees’ representatives had raised concerns over it in an earlier meeting as raising the investment cap in equity could be risky,” the Board member mentioned.
Labour Ministry officers mentioned extra knowledgeable discussions have to occur earlier than taking a name on the choice and subsequently, will probably be taken up for dialogue on the upcoming conferences of the Finance Investment and Audit Committee (FIAC) after which on the conferences of the CBT.
“This is true that we want returns (on investment) because we want that interest rate should not fall further. Beyond that, there should be good returns. So we are looking at various strategies, how we can earn that return on investment. It was not discussed in the CBT meeting. Some deliberations took place in FIAC but we want more informed discussions to happen. So based on that we will take a call. These are sensitive matters because you have to protect the interest of subscribers and at the same time we also have to see that it is not a risky investment. A balancing act has to be done and it has to be within the pattern of investment,” a senior Labour Ministry official mentioned.
The EPFO can also be funding patterns in different pension funds comparable to Pension Fund Regulatory and Development Authority (PFRDA). “We are also looking at how PFRDA is doing. We are going through that literature also about what kind of steps PFRDA has taken. But then PFRDA is a contributory fund where the investor knows the risk because the document is there but an EPFO subscriber does not have a (legal) document about the risk involved. So a call has to be taken on that,” the official additional mentioned.
The EPFO can make investments as much as 15 per cent of its funds in fairness, as per the sample of funding notified by the Centre and inner pointers. It invests solely in exchange-traded funds (ETFs) and never particular person shares.
The price of return from investments of EPFO assumes significance because the retirement fund physique opted to decrease its rate of interest for 2021-22 to eight.1 per cent, a four-decade low.
The Finance Ministry, which ratifies the EPF rate of interest advisable by the CBT, has through the years questioned the excessive rate of interest supplied by the EPFO. It had questioned the 2019-20 price and the 2018-19 price of 8.65 per cent as effectively, apart from the EPFO’s publicity to IL&FS and comparable dangerous entities.
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Among different selections taken by the EPFO, the CBT gave in-principle approval for centralised disbursal of pension for additional bettering the EPFO providers for pensioners, a Labour Ministry assertion mentioned.
Yadav additionally launched a pension and staff deposit linked insurance coverage scheme calculator, offering an internet facility to pensioners and subscribers to calculate the advantages of Pension and Death Linked Insurance Benefit for which they’re eligible. He additionally launched the coaching coverage of EPFO and a authorized framework doc.
The fund physique additionally accredited appointment of Citibank as custodian of securities for 3 years together with a proposal to increase the tenure of the current custodian Standard Chartered Bank until the brand new custodian takes over, along with ratification of the tenure of SBI MF and UTI MF because the ETF managers.
