EPFO to provide safer, more stable returns to those nearing retirement

The organisation will invest a higher percentage of the money from young subscribers into equity. For those nearing retirement, the money will be invested in a safe debt

The Employees' Provident Fund Organisation (EPFO) may soon provide age-based and risk profile-based investment options to its subscribers. With this, the organisation will invest a higher percentage of the money from young subscribers into equity. For those nearing retirement, the money will be invested in safe debt.

A report by Economic Times (ET) stated that the step is a part of the organisation's long-term roadmap to expand its portfolio and improve the returns of investment. 

Under the current rules, EPFO can invest up to 15 per cent of the funds into equity through ETFs. These can be based on the Nifty, Sensex, and Bharat 22 indices. EPFO has 60 million subscribers with a corpus of Rs 15 trillion, the report added. 

"This could further be differentiated on the basis of age and risk profile with investment more in equity for younger members and in other safe instruments for the elderly," an official told ET.

The official further added that the pension funds can be invested for a longer term in infra and real estate for higher returns. 

"This could be a good approach for the pension scheme as it will give EPFO subscribers the option of the flexibility of investment, as is available in the National Pension Scheme and will make EPFO more competitive," Saraswathi Kasturirangan, partner at Deloitte India was quoted in the ET report as saying.

EPFO started investing in equities only in 2015. It has, till date invested Rs 1.7 trillion cumulatively and has redeemed Rs 22,000 crore till March 31.