Home >Politics >Policy >`20 trillion provident fund corpus likely by March 2025: K.K. Jalan

New Delhi: The corpus of the Employees Provident Fund (EPF) is steadily growing, and in less than 10 years, it will be about 20 trillion or two-and-a-half times its current size, says central PF commissioner K.K. Jalan.

Employees Provident Fund Organization’s (EPFO) entry into the stock market will fetch better returns, and if that happens, the retirement body will go to the equity market in a bigger way, says Jalan.

He does not see much competition from the National Pension System for EPF and asserts that EPFO is working hard to become more user-friendly and lot more work is needed to make it a smooth, bank-like financial organization.

Edited excerpts from an interview:

You have made the first entry into the stock market. What next?

We have made the first investment in ETFs (exchange-traded funds), and therefore, we have implemented the direction which was given by the ministry of finance and the ministry of labour.

We are experimenting at this stage. The future seems to be bright.

Our advisors have advised that we will get a better return from the market. If that happens, and I don’t think that will not happen, we will naturally go in a bigger way in the equity market. For a growing PF corpus, equity investment is a need.

EPFO corpus is growing and now you are planning to give NPS as an alternative to the EPF, which may affect EPFO’s growth. Where do you see EPFO corpus in five years’ time?

EPF has its own benefits. An EPF subscriber gets a bunch of benefits: PF savings, employees’ pension scheme and employees deposit-linked insurance. I don’t think others are providing all these facilities. Option is good but employees will go where they see benefits.

As far as growth is concerned, we are growing steady and will continue to do so. If we do a mathematical calculation, we should have more than 10 lakh crore ( 10 trillion) PF corpus by mid-2018, and 20 trillion by March 2025.

Then, 15% of the PF money in equity will be really big. Will you go beyond 15% in equity?

Mathematically, yes (it will be a big investment). We have taken the baby steps now. The government and the central board of trustees will decide how to move ahead. Nobody can predict the future.

Over the last two years, EPFO has taken several measures to become user-friendly and transparent; but despite your huge corpus and subscriber base, you are still not smooth, akin to a bank-like institution?

In a greater extent, I agree. We have a lot of work to do and we have our plans ready. We have done a substantial work, but that is still very less compared to what we want to do.

The good thing is that we are now in the know of things, which we had not done till now. It makes our job easier in a way and difficult in another way.

Easier because we know what we need to do, and the timelines by which we can do. Difficult, because there is a lot to be done to make EPFO as smooth as a bank.

But EPFO has taken several measures to improve facilities: timelines for settlement of PF, pension and insurance claims under EPFO have been revised from 30 days earlier to 20 days now. The decision was taken recently; as a result, the claimants would now be entitled to speedier service. In July, 11.56 lakh claims were settled, and out of the same, 43% were settled within three days and (overall) 83% within 10 days.

You have activated the PF portability service through Universal Account Number, but there is a huge backlog of KYC verification by employers. What are you doing on this?

We have now made it mandatory for employers (to verify the KYC). We have given employers incentives on doing everything online, and now, we may have to impose some harsh measures.

If not incentives, harsh measures may bring them to work and solve the problem.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Redeem a Gift Card Logout