The Employees’ Provident Fund Organisation (EPFO) is considering a plan to reward its fund managers based on investment performance.
The goal is to improve returns on retirement savings for millions of subscribers.
Under this proposal, fund managers who deliver better results could receive larger allocations of funds, motivating them to manage portfolios more efficiently and effectively.
Focus on Benchmarking and Pension Investments
The proposal is part of a wider effort by EPFO to create a new benchmarking system for investments, especially in debt portfolios, which make up a large portion of provident fund investments.
Officials are also exploring separate benchmarks for the Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS).
The pension scheme is being given special attention because it involves long-term investments with different return expectations.
Benefits for EPFO Subscribers
If implemented, this incentive framework could improve investment efficiency and boost accountability among fund managers.
Ultimately, EPFO subscribers could benefit from higher returns on their retirement savings, making their provident and pension funds work harder for their future.