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Friday, October 22, 2021

EPFO may sell ETF to pay 8.5% interest on PF, 2700 crores

EPF Latest News Updates: The Employees Provident Fund (EPFO) may soon sell part of its investment of Rs 6,000 crore to the Exchange Traded Fund (ETF). The move will generate an income of Rs 2700 crore to the retirement fund body. CBDT announced 8.50 per cent interest on EPF this year. To accomplish this, CBDT is going to have a meeting tomorrow on Wednesday i.e. 9 September. In this meeting, apart from selling old ETF holdings, some important things can be considered.

Why ETF may have to be sold?

The organization has funds for 8.15 per cent return on PF, but CBDT will have to sell its ETF for the remaining 0.35 per cent. According to an EPFO ​​official, CBT also gave us permission to sell the investment at the appropriate time. We can go ahead with this plan in the meeting to be held on 9 September. Initially, CBDT wanted to sell ETF Holdings in March itself but then the company had to cancel its plan due to market crash. The proposal was valid till June, but it was renewed again.

EPFO Investment Pattern

Since 2015, EPFO ​​has been investing in the stock market through ETFs. As per the current investment pattern, EPFO ​​invests 15 per cent of its annual incremental receipts in equity, the rest in debt. The EPFO ​​invests in ETFs based on Nifty 50, SENSEX, Central Public Sector Enterprises (CPSE) and Bharat 22 Index. EPFO does not invest in shares and equity of individual companies. The total amount invested by EPFO ​​till September 2019 by EPFO ​​is Rs 86,966 crore.

Important decision possible in meeting

Some important decisions can be made in the meeting of the Employees Provident Fund Organization (EPFO) on Wednesday. The Central Board of Trustees (CBT) announced an 8.50 per cent interest on EPF in March this year. In the meeting, the matter of paying 8.5 percent interest on the Employees Provident Fund for the year 2019-20 can also be raised. The Central Board of Trustees of EPFO ​​in its meeting on 5 March recommended keeping the interest rate on EPF at 8.50 per cent for 2019-20, which is already 0.15 per cent lower. This proposed rate of EPF will be the minimum rate for 7 years.

7-year minimum rate

Please tell that only with the consent of the Finance Ministry, the decision to amend the annual interest rate on EPF applies. The Central Board of Trustees has decided in this regard only in March. Earlier, for the financial year 2018-19, EPF account holders received 8.65 per cent interest on their deposits.

Rate of interest in the past

EPFO paid 8.65 per cent interest on the provident fund in FY 2016-17, 8.55 per cent in FY 2017-18. Whereas in FY 2015-16 it was 8.8 per cent annually. Earlier, 8.75 percent interest was paid on the provident fund in 2013-14 and 2014-15 and 8.5 percent in 2012-13.

 

Source: www.financialexpress.com

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