Hyderabad: The Labour Ministry has allowed investing a part of retirement fund body EPFO's incremental corpus in equity market in the form of exchange-traded funds, Central Provident Fund Commissioner K K Jalan said on Friday.
"CBT in its meeting has decided and Labour Ministry has given us orders to place at least 5 percent of our (EPF corpus) funds in the equity. This year we will invest only in exchange traded funds (ETF)," Jalan told reporters here.
"A decision in this regard was taken at the meeting of central board of trustees (CBT), the apex decision-making body of EPFO on March 31 and subsequently the Labour Ministry had given EPFO a direction through a notification on April 23 for investment of five percent of its corpus into ETF," he said.
The Finance Ministry had asked EPFO to consider investing a part of its corpus, (between 5 percent and 15 percent of PF money) in ETF.
"Presently CBT has decided we will go only for ETF," Jalan said, adding around Rs 6,000 crore to Rs 7,500 crore of the incremental corpus will be invested in ETF this year.
Union Minister of State for Labour Bandaru Dattatreya said a decision was taken regarding continuation of minimum pension of Rs 1,000 to the pensioners of EPS on a perpetual basis which is expected to benefit more than 19 lakh pensioners who are drawing less than Rs 1,000 pension.
Jalan further said Rs 27,000 crore funds were lying inactive in over 8 crore inoperative accounts of the EPFO adding, "There was only one time deposit in around 2.5 crore accounts and we wish to recommend to the Centre for closure of such accounts."
For getting claims from inoperative accounts, the government proposes to make activation of UAN (Universal Account Number) mandatory from next month, he added.
On the norms for claims settlement, the minister said the mandatory ceiling has been reduced to 20 days as against the mandated 30-day time.
Dattatreya said he will soon write to Andhra Pradesh Chief Minister N Chandrababu Naidu to provide land in the capital region for establishment of EPF office building.
