The Employees’ Provident Fund Organisation (EPFO) is working on a proposal to introduce performance-based incentives for its fund managers as part of efforts to improve returns on retirement savings.

Under the plan being considered, fund managers who deliver better investment performance could receive larger allocations of funds, encouraging stronger results in portfolio management. The move is aimed at aligning fund-management rewards with the returns generated for EPFO subscribers.

The proposal is linked to EPFO’s broader effort to develop a new benchmarking system for investments, particularly for debt portfolios, which form a major part of provident-fund investments.

Officials are also reviewing the creation of separate performance benchmarks for the Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS). Special attention is being given to the pension scheme because it involves long-term investments with different return expectations.

If implemented, the incentive framework could help improve investment efficiency and strengthen accountability in fund management, ultimately benefiting millions of EPFO subscribers through potentially better returns on their savings.