The Employees’ Provident Fund Organisation (EPFO) is planning to introduce performance-based incentives for its fund managers.
The idea is simple: fund managers who deliver better investment results could receive larger allocations of funds.
This move aims to reward strong performance and ensure that fund-management efforts directly benefit EPFO subscribers.
Essentially, better returns for the fund could mean better returns for the people saving for retirement.
Linking Incentives to Benchmarks
The incentive proposal is part of a bigger plan to develop a new benchmarking system, especially for debt portfolios, which make up a large part of EPF investments.
Officials are also looking into creating separate performance benchmarks for the Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS).
The pension scheme is getting special attention because it involves long-term investments with different expectations for returns.
Potential Benefits for Subscribers
If implemented, the new incentive system could improve investment efficiency and strengthen accountability among fund managers.
For millions of EPFO subscribers, this could mean better returns on retirement savings, making the provident fund more effective at securing financial futures.
