The Labour Ministry has allowed investing a part of retirement fund body EPFO’s incremental corpus in the equity market in the form of exchange-traded funds, Central Provident Fund Commissioner KK Jalan said on Friday.

“CBT in its meeting has decided and Labour Ministry has given us orders to place at least 5 per cent of our (EPF corpus) funds in equity. This year we will invest only in exchange-traded funds (ETF),” Jalan told reporters here.

“A decision in this regard was taken at the meeting of the central board of trustees (CBT), the apex decision-making body of the EPFO on March 31 and subsequently the Labour Ministry had given the EPFO a direction through a notification on April 23 for investment of 5 per cent of its corpus in ETF,” he said.

The Finance Ministry had asked the EPFO to consider investing a part of its corpus (between 5 per cent and 15 per cent of PF money) in ETF.

“At present as CBT has decided, we will go only for ETF,” Jalan said, adding around ₹6,000-7,500 crore of the incremental corpus will be invested in ETF this year.

The Union Minister of State for Labour Bandaru Dattatreya said a decision was taken regarding continuation of minimum pension of ₹1,000 to the pensioners of EPS on a perpetual basis which is expected to benefit more than 19 lakh pensioners.

Inoperative accounts

Jalan further said ₹27,000 crore funds were lying inactive in over 8 crore inoperative accounts of the EPFO, adding, “There was only one-time deposit in around 2.5 crore accounts and we wish to recommend to the Centre for closure of such accounts.”

For getting claims from inoperative accounts, the government proposes to make activation of universal account number mandatory from next month, he added.

On the norms for claims settlement, the Minister said the mandatory ceiling has been reduced to 20 days as against the mandated 30-day time.