By laksh5382 
In a significant step, the Central Board of Trustees (CBT). Employees Provident Fund Organization (EPFO) Approved guidelines to allow provident fund investment in units of public sector sponsored Infrastructure Investment Trusts (InvITs). Real Estate Investment Trust (REIT),
This is an important step towards diversifying EPFO’s equity market investments, expanding options beyond the current reliance on Exchange Traded Fund (ETF),
In April 2015, the superannuation fund body was allowed to invest anywhere between 5 per cent and 15 per cent of all its new accretions in the equity market. However, it could do this only through ETFs.
In the 236th meeting of the CBT, EPFO here on Saturday, the CBT, among other decisions, approved the ‘Redemption Policy’ for ETF investments in Central Public Sector Enterprises (CPSEs) and Bharat 22 to generate income for the ‘Interest Account’ of the EPF scheme. Also approved.
Saturday’s CBT meeting was chaired by Union Minister for Labor and Employment and Youth Affairs and Sports Mansukh Mandaviya.
Till now, EPFO has invested in ETFs based on BSE Sensex index or NSE Nifty 50 index. It has invested in CPSE ETF and Bharat 22 ETF. By the end of March 2024, EPFO has invested around ₹2.4 lakh crore in the ETF.
Under the new redemption policy, EPFO can reinvest 50 per cent of ETF redemptions in equities, with the rest going into asset classes such as G-Secs and debt instruments.
InVITs and REITs are innovative financial instruments introduced to unlock capital in the infrastructure and real estate sectors. They function as pooled investment vehicles similar to mutual funds, but focus on income-producing infrastructure assets (InVITs) or commercial real estate assets (REITs). These instruments provide investors with stable returns in the form of dividends and capital appreciation.
In India, the journey of these vehicles began with the regulatory framework SEBI In 2014, the path to their listing and trading was paved. Since then, India has seen the establishment of five REITs and 19 InVITs.
By the end of September 2024, these vehicles have collectively raised over ₹1.5 lakh crore, with REITs contributing significantly through public markets and InVITs leveraging both institutional and retail investments.
They have played a key role in channeling long-term funds into key sectors, reducing the financing burden on developers and providing retail investors access to high-value assets.
other decisions
CBT on Saturday Recommended EPFO Amnesty Scheme 2024 to the Central Government. This initiative is designed to encourage employers to voluntarily disclose and rectify past non-compliance or low-compliance without facing penalties or legal repercussions.
A simple online declaration from employers will suffice to avail the benefits of the scheme. By providing a limited window for voluntary compliance, the scheme aims to extend social security benefits to more employees, rebuild trust with employers and promote formalization of the workforce.
This waiver scheme will support the implementation of the employment linked incentive scheme announced in Budget 2024-25 to boost employment creation and encourage formalization of jobs in the economy.
It is expected that many small establishments (under MSME sector or otherwise) would like to avail benefits under the ELI scheme but would be concerned in enrollment under EPFO. This waiver scheme will provide confidence to such employers to enroll without any fear or additional financial burden.
In another important decision, the CBT approved amendments to the EPF Scheme, 1952 on the interest calculation front.
As per the existing provisions, for claims settled by 24th of the month, interest is paid only till the end of the previous month. Now, interest will be paid to the member till the date of settlement. This will provide financial benefits to the members and reduce complaints.