Kathmandu, Aug 1: A bill to amend the Employees Provident Fund (EPF) Act, 1962, has been registered in the House of Representatives, paving the way for the EPF to launch and manage mutual funds using its own resources while broadening its investment powers.
The 10th Amendment Bill, tabled on Thursday, proposes allowing the EPF to establish companies independently or jointly with other institutions to operate mutual funds and invest its funds in the capital and financial markets. Under the existing law, the EPF can only establish companies to operate mutual funds with the participation of employees and self-employed contributors.
The proposed amendment would also permit the EPF to invest in mutual funds, private equity funds, and venture capital funds approved by the Securities Board of Nepal.
The bill also seeks to expand lending facilities. It allows the EPF to finance housing projects developed by eligible companies and provide loans to contributors to purchase homes built under those projects. In addition, contributors would be able to take loans from their accumulated savings for purposes beyond housing.
Current rules allow contributors to withdraw up to 60 per cent of their savings after five consecutive years of contributions. Under the amendment, such withdrawals would instead be treated as loans under terms set by the EPF board, and contributors would have to repay the principal and interest before obtaining another loan.
The bill also strengthens the EPF’s recovery powers. If a borrower defaults and an auctioned property remains unsold, ownership of the property would automatically remain with the EPF.
It proposes restructuring the EPF’s governing board into a seven-member body chaired by a government-nominated senior civil servant, with representatives from government agencies, financial institutions, organised sectors, and the EPF administrator. The administrator’s term would be four years, while other board members would serve three-year terms with eligibility for one reappointment.
The Finance Ministry said the amendment aims to modernise the EPF Act, clarify existing provisions, extend EPF coverage to provincial and local government employees, and authorise the fund to manage other legally established social security funds.
People’s News Monitoring Service
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