epfo and equity markets

In a historic move, retirement fund body Employees' Provident Fund Organisation (EPFO) on Thursday kick-started its investment in the stock markets for the first time.

Here is a 10-Point Cheat-Sheet

1) The provident fund body plans to invest Rs 5,000 crore this fiscal year.

2) Labour Minister Bandaru Dattatreya said that EPFO plans to gradually increase its investment in stock markets. The initiative to invest in stock markets was started to provide better returns for subscribers, he added. Currently, the rate of interest on provident fund deposits is 8.75 per cent.

3) The Labour Ministry had notified new investment pattern for EPFO in April, allowing the body to invest minimum of 5 per cent and up to 15 per cent of its funds in equity or equity related schemes. However, the EPFO management has decided to only invest 5 per cent of its incremental deposits in stock market during the current fiscal.

4) EPFO has Rs 8.5 lakh crore under its management, most of it invested in government bonds. It has a base of around 6 crore subscribers.

5) EPFO will invest in stock markets through exchange traded funds (ETF) that track the country's two main share indices - Sensex and Nifty. An ETF comprises a basket of stocks and it trades on an exchange like a stock and tracks an index.

6) EPFO's equity investment will be run by State Bank of India's asset management unit.

7) Analysts have welcomed the pension fund's decision to buying stocks. They hope that like state-run Life Insurance Corp of India, EPFO can be a steady source of funds especially in times of market turbulence.

8) But some analysts were disappointed at the initial amount. "The government needs to increase its investment into equities," said G Chokkalingam, founder of Equinomics, a research and fund advisory firm.

9) EPFO's initial amount of Rs 5,000 crore is only a fraction of the Rs 47,000 crore that Life Insurance Corp invested in stocks in the year to March 2015.

10) Indian shares were Asia's second-best performers in dollar terms last year but have retreated after hitting record highs in March. more  

View all 14 comments Below 14 comments
In case of EPF pension eligibility is minimum ten years of service. EPF is different from Govt. department pension. more  
No. minimum 20 years service required in pure govt. department for eligibility of pension. more  
Lack of accountability and cumbersome accounting procedure has placed the workmen at the receiving end. PF dept . has almost nine lakh crores of Rupees besides Rs. 27000 crores as unclaimed funds and poor workers who contributed to build such a huge empire are being given pension as low as Rs. 1000 per month. What a funny social security measure by the Govt. more  
Mr. Joshi , please go to site EPF PENSION. That contains all the details as well a calculator is incorporated for calculation of EPF pension. This calculator has also been depicted above by me. more  
Will any one guide me.
I had joined in 2004 at the age of 52 years.
There is a new E.P.f. account has been opened( I have no any account of E.P.F.),
Steel I am working with company.
Now my age are 63 years.
my basic Pay are Rs.9975/- Total salary comes to 28250/-
and P.F cuts Rs.1197/- per month.
Shall I get the pension when I retired?
What amount approx eligible for pension? more  
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