Relitrans Financial

Now your investment in EPF will not find its way in stock markets

As a salaried individual you may be contributing your hard earned money into the Employee Provident Fund (EPF) account and making some provision for your golden years. You see, Provident Fund (PF) corpus that you build over your entire working life is a significant contributor to your retirement wealth. Also if you have invested in equity instruments wisely and balance your portfolio as age progresses, the process of wealth creation can even get better, enabling you live golden year of retirement comfortably.

In fact recognising this very trait of equities of being an effective wealth multiplier and a hedge against inflation; the Finance Ministry in 2008 had increased the ceiling on investment in equities by provident funds to up to 15% of the corpus from the earlier 5% (in 2003), but restricted it to equity shares of firms in which derivative trades are allowed on the National Stock Exchange and the Bombay Stock Exchange. The Central Board of Trustees (CBT), the apex advisory body of the Employees' Provident Fund Organisation (EPFO), was not in favour of liberalising the investment norms for EPF earlier, but later agreed subject to the condition that there is a guaranteed "reasonable rate of return" (a capital protection assurance) be provided by the Government. But not having received any official assurance from the Government, now EPF investments will not find their way in stock markets.

Value investing