EPFO Board approves reinvestment norms for ETF redemption, amnesty scheme for employers

A redemption policy for investments in exchange-traded funds (ETFs) and reinvestment of 50 per cent of those redemption proceeds into ETFs, along with an amnesty scheme for employers to voluntarily disclose and rectify past non-compliance without penalties was approved by the Central Board of Trustees of the Employees’ Provident Fund Organisation (EPFO) in its 236th meeting Saturday.

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The Board also discussed the pilot of the Centralised Pension Payment System (CPPS), which is likely to be launched on December 31.The EPFO, which has 7.37 crore contributing subscribers and a total of 32.56 crore members, plans to increase the ETF redemption period to 7 years from 4 years over the next six years to improve yields. While 50 per cent of the redemption proceeds will get reinvested in equity through ETFs such as Bharat 22 and CPSE ETFs, the remaining 50 per cent would be invested in other asset classes as per the existing pattern such as government securities and corporate bonds.