Central Board Of Trustees Makes Major Changes; EPFO Subscribers To Get Higher Return

The Labor Ministry on Saturday informed that Central Board of Trustees of the employee’ provident fund (EPFO) has come up with a redemption policy for exchange traded funds(ETF) aimed at generating higher income for the subscribers.

The board has decided over reinvestment of 50% redemption amount received from ETF back in central public sector enterprises(CPSE) and Bharat 22 funds, the sources revealed. However, the redemption policy makes it mandatory for the funds to be hold for 5 years.

Notably, the other 50% of redemption proceeds will be invested in financial instruments like government securities and corporate bonds etc.

The guideline released labor ministry sheds light on significant amendment in EPF scheme 1952. The existing provision pays the interest only up to the preceding month when claim is settled till 24th of the month. However, the new regulation offers interest benefit till the date of claim settlement.

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The Employees’ Provident Fund Organization (EPFO) has announced several important reforms aimed at streamlining services for its members and pensioners.

The EPFO’s Central Board of Trustees (CBT) has approved a significant increase in the auto claim settlement limit, raising it from Rs 50,000 to Rs 1 lakh. This extended facility will also cover claims related to advances for housing, marriage, and education.

In a move to simplify the banking process, the CBT has also approved changes to the criteria for empanelling banks for centralized collection of EPF contributions. All agency banks listed with the Reserve Bank of India (RBI) will now be eligible. Additionally, the board has relaxed the eligibility criteria for other scheduled commercial banks, lowering the minimum requirement for total EPFO collections from 0.5% to 0.2%.

Another major decision taken by the CBT was the approval of the full rollout of the Centralized Pension Payment System (CPPS) from January 1, 2025. The CPPS, a part of EPFO’s ongoing IT modernization project, is set to benefit over 7.8 million Employees’ Pension Scheme (EPS) pensioners. The system will streamline pension disbursements, allowing pensioners to access their payments from any bank or branch across the country, reducing processing time, and eliminating the need for bank visits for verification or submission of documents.