Investments in EPF have increased during last 3 fiscal years

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Investments in Employee’s Provident Funds (EPF) Scheme, have increased during the last three financial years, Santosh Kumar Gangwar, Minister of State for Labour and Employment said in a written reply to Lok Sabha on March 15.

EPF investments increased 19.32% year-on-year to Rs 1,68,661 crore in FY20 from Rs 1,41,346.85 crore in FY19.The total investments made in EPF scheme in FY18 stood at Rs 1,26,119.92.

The EPFO, which has more than five crore active subscribers, manages social security funds of workers in the organised/semi-organised sector in India.

For the current fiscal year, the retirement fund body has decided to retain 8.5 per cent annual rate of interest on provident fund deposits.

Since FY’2014, the EPFO has consistently generated returns of not less than 8.5 per cent. A high EPF interest rate along with compounding makes a significant difference to gains of subscribers. This is despite the fact that the EPFO has consistently followed a conservative approach towards investment, putting highest emphasis on the safety and preservation of principal first approach.

During the period from 2015-16, the EPFO prudently started investing in equity through exchange traded funds based on the NSE 50 and BSE 30 indices.

The investment in equity assets started from 5 per cent for FY’2015 and subsequently went up to 15 per cent of the incremental portfolio.

Net new enrolments with retirement fund body EPFO grew by 24 per cent to 12.54 lakh in December 2020 compared to the same month in 2019, according to the payroll data released in February. Despite COVID-19 pandemic, the EPFO added around 53.70 lakh subscribers during the first three quarters of the current FY21 (April to December in 2020), the data showed. During FY20, the number of net new subscribers rose to 78.58 lakh as compared to 61.12 lakh in the preceding fiscal.