EPFO Board Approves ETF Redemption Strategy to Enhance Member Earnings
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New Delhi, Nov 30 (NationPress) The EPFO Central Board of Trustees convened on Saturday under the leadership of Union Labour and Employment Minister Mansukh Mandaviya, where they ratified a Redemption Policy for investments in exchange-traded funds (ETFs) associated with CPSE and Bharat 22. This initiative is designed to enhance earnings for the EPF Scheme's Interest Account.
The newly approved policy stipulates a minimum holding period of five years, mandates returns that surpass government securities, and requires performance to exceed both the CPSE and Bharat 22 indices, as detailed in an official statement released post-meeting.
Additionally, the CBT granted approval for guidelines regarding investments in units offered by Public Sector Undertakings (PSUs) that sponsor Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), which are regulated by the Securities and Exchange Board of India and classified under Categories V(b) and V(d) of the investment pattern.
These measures are aimed at making prudent investments with the corpus to ensure better returns for approximately 70 million EPFO subscribers.
In another significant decision, the CBT amended paragraph 60(2)(b) of the EPF Scheme, 1952. Previously, interest was only paid up until the end of the preceding month for claims settled by the 24th. Now, interest will be calculated up to the actual settlement date, providing financial advantages to members and reducing complaints.
Historically, claims accruing interest were not processed from the 25th until the end of the month to prevent interest loss for members. With this new decision, claims will be processed throughout the month, leading to quicker settlements, lower backlogs, and optimized resource usage. This illustrates the EPFO's commitment to delivering efficient, transparent, and member-focused services.
The Board was updated that EPFO has significantly expedited its operations, having settled 3.83 crore claims totaling over Rs.1.57 lakh crore in the current financial year. For FY 2023-24, EPFO has processed 4.45 crore claims amounting to Rs.1.82 lakh crore.
EPFO is also enhancing its IT framework through the implementation of the CITES 2.01 project. This project involves deploying a new operating system version that will streamline the claim settlement process. A new software module will facilitate UAN-based accounting, establishing a one member, one account system to alleviate claim settlement difficulties for members.
The Board was briefed on the major initiatives undertaken by the EPFO since the last CBT meeting. The auto claims settlement limit has been raised from Rs. 50,000 to Rs. 1 lakh, which also applies to advances for housing, marriage, and education. This financial year, 1.15 crore claims have been settled through auto mode. The Board noted with approval that the rejection rate has decreased to 14 percent as of November 2024.
Moreover, the CBT was informed that the first pilot of the Centralised Pension Payment System (CPPS) was successfully conducted in Karnal, Jammu, and Srinagar in October 2024. The second pilot commenced in November 2024 across 20 additional Regional Offices, with Rs.195 crore already disbursed to 8.3 lakh pensioners.
The meeting also included Minister of State for Labour Shobha Karandlaje, Secretary of Labour & Employment and CBT Co-Vice-Chairperson Sumita Dawra, as well as Central Provident Fund Commissioner and Member Secretary Ramesh Krishnamurthi.
