The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) has approved a redemption policy for exchange traded fund (ETF) investments to generate higher income for its subscribers, the labour ministry said on Saturday.
Sources said the CBT has approved reinvestment of the 50% redemption proceeds from ETFs back into central public sector enterprises (CPSE) and Bharat 22 funds. The policy mandates a minimum five-year holding of the funds.
The remaining proceeds will be invested into other financial instruments, such as government securities and corporate bonds, sources said.
The CBT approved the guidelines for investment in units issued by public sector undertaking-sponsored infrastructure investment trusts (InvITs)/real estate investment trusts (REITs) regulated by the Securities and Exchange Board of India (SEBI), the ministry release said.
The board also approved a significant amendment to the EPF Scheme, 1952. As per existing provisions, for claims settled till every 24th of a month, interest is paid only up to the end of the preceding month. Now, the interest will be paid to the member up to the date of settlement. This will result in financial benefit to members and reduce grievances, the release said.
Moreover, the CBT has recommended the EPFO Amnesty Scheme 2024 to the central government.
The scheme is designed to encourage employers to voluntarily disclose and rectify past non-compliance or under-compliance without facing penalties or legal repercussions.
This amnesty scheme will support implementation of the employment-linked incentive scheme announced in Union Budget 2024-25, to foster employment generation and incentivise formalisation of jobs in the economy. It is expected that several small establishments (under MSME sector or otherwise) might wish to avail of the benefits under the ELI scheme, but would be worried in enrolling under EPFO, the release said.
The board also ratified the extension of EDLI (employees’ deposit linked insurance) benefits with retrospective effect from April 28, 2024. Under this scheme, an insurance cover in the range of Rs 2.5 lakh to Rs 7 lakh is provided to the dependents of the member in case of death. The proposal, supported by actuarial valuation indicating a surplus of Rs 6,385.74 crore, has been approved to ensure uninterrupted benefits to EPF members.
Also, the limit for auto claim settlement facility has been extended to Rs 1 lakh from Rs 50,000 earlier,
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