EPFO Set to Revamp Investment Strategy to Reduce Risk

New Delhi: The Employees’ Provident Fund Organisation (EPFO) is planning a major overhaul in the way it invests members’ funds, aiming to reduce market-related risks. Instead of allocating money across five separate schemes, EPFO will now pool funds into a single shared fund and invest collectively. Additionally, large investments will be made annually rather than monthly, shielding members’ money from short-term market fluctuations.

According to The Economic Times, the final approval for these changes could come in the Central Board of Trustees (CBT) meeting scheduled for March 2. However, announcements regarding interest rates for the financial year 2025-26 are not expected during this session.

Since 2015, EPFO has allocated 5–15% of new earnings into exchange-traded funds (ETFs). Under the proposed plan, a unified ETF investment system will be introduced across all schemes. Previously, EPFO invested separately for each scheme, without pooling the funds. Moving forward, the organisation plans to invest once a year, rather than following a monthly cycle.

Key Highlights of the Proposal:

• Funds from the five separate EPFO schemes will be combined and invested into ETFs.
• The investment cycle will shift from monthly to annual.
• EPFO is also considering selling bonds from the Delhi–Meerut Expressway buyback to generate profits.
• Final approval for the proposals will be discussed in the CBT meeting on March 2.
• Interest rate announcements for FY 2025-26 are not part of the current agenda.

The EPFO investment committee has already cleared the proposals, which now await final approval. The move is expected to make EPFO investments more streamlined, efficient, and less exposed to market volatility.