EPFO Updates: The Employees’ Provident Fund Organisation has made advanced decisions on offloading equity to August 2022 instead of February 2023. This move will help the retirement body plan liquidation of its equity investments better.
“However, from this year onwards, we will take a decision sometime in August, so that actual offloading can happen over the next six to seven months depending on the stock market conditions,” said a senior government official
EPFO offloads equity on the ‘first in, first out’ principle, which means the investments made in equity in the first year are offloaded in the fourth year thus, the money remains invested for a longer period of time and earns better returns.
EPFO started investing in equities in 2015-16, starting with 5% in the first year, 10% in the second year, and 15% in the subsequent years. It has made a cumulative investment of ₹1.7 lakh crore, out of which over ₹22,000 crores have been redeemed till March 31, 2022.
The statutory body invests up to 15% of its incremental corpus of ₹1.5 lakh crore into equity in the form of exchange-traded funds, both on the Nifty and Sensex.
The stockpiled corpus now has nearly 60 million subscribers to it and stands at over ₹16 lakh crore.
According to the government, sustainable higher returns on PF deposits every year require that the retirement fund body invests more in equity as long-term returns on such investments are nearly double that on debt instruments.
Must Read: Weather Updates: Why IMD’s Forecasts are Failing
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER.
