EPFO considers Rs 25,000cr war chest to stabilise interest payouts
The Employees’ Provident Fund Organisation is considering the creation of an Interest Stabilisation Reserve worth 25,000 crore rupees. This fund is intended to shield member interest payouts from market volatility and corporate bond defaults. The proposed reserve would be funded using surplus gains from ETFs. These funds would then be invested in government securities. Reports suggest that such a reserve can effectively maintain interest rate stability based on past performance.
Employees’ Provident Fund Organisation is exploring the establishment of a Rs 25,000-crore Interest Stabilisation Reserve. This reserve aims to protect members’ interest payouts from corporate bond defaults and other market fluctuations. A report suggested that the fund should be built via surplus ETF gains and will invest in government securities. Historical performance indicates that this reserve can effectively manage interest rate stability.