The Employees\u2019 Provident Fund Organisation (EPFO) is working on guidelines to invest 3% of its fresh annual investments in alternative investment funds (AIFs), including those that finance startups, The Times or India reported.<\/p>\n
If approved, the move could give workers\u2019 retirement savings<\/a> exposure to startups, private equity and other growth-oriented assets.<\/p>\n It would also mark a gradual shift in the retirement fund body’s investment strategy, which has traditionally focused on government securities, debt instruments and other relatively safer options.<\/p>\n However, the proposal is still under consideration and will require approval from EPFO\u2019s Central Board of Trustees (CBT).<\/p>\n How the new investment would work?<\/p>\n According to the news report, the proposed 3% of EPFO’s fresh annual accretions could be invested into Category I and Category II AIFs. This means the allocation would come from new inflows receiving during the year, rather than the entire retirement corpus managed by the organisation.<\/p>\n AIFs are privately pooled investment vehicles that collect money from investors and deploy it according to a defined investment strategy. Unlike conventional mutual funds, they can invest in less liquid assets, unlisted companies and specialised investment opportunities.<\/p>\n How does EPFO currently invest your money?<\/p>\n EPFO manages retirement savings worth around \u20b930 lakh crore belonging to nearly 30 crore members. Since this money is meant to support workers after retirement, the organisation follows an investment strategy that balances returns with the need to protect the corpus from extreme volatility.<\/p>\n