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Ambarish Mukherjee

Seeking some sort of guarantee on timely and better rate of return

New Delhi , April 16

Trade unions having representation in the Central Board of Trustees (CBT) of the Employees' Provident Fund organisation (EPFO) may soften their stand on market-related investments by the EPFO, which has been permitted by the Ministry of Finance in its revised guidelines issued in January 2005.

This, however, does not mean that workers' funds would be exposed to market risks and a middle way is being deliberated upon within the various unions, a CBT member told Business Line.

"Market investments are always doubtful and what we want is some sort of a guarantee. Even if it is not a hundred per cent guarantee, it should be at least 80 to 90 per cent guarantee of timely return and higher than present rate of return. Only then the workers could be convinced," the CBT member said.

Looking for safe options

According to Mr Sanjeva Reddy, President of the INTUC and one of the senior-most members of the CBT, "The alternative could be to invest in semi-Government organisations. Investments in private organisations involve much higher risk and it needs to be ensured that workers' funds are not lost."

Semi-Government organisations would include those companies and organisations that have an investment grade rating from at least one rating agency and where the Government, through its shareholding, would have a say in the functioning of the company. The guidelines, however, allow EPFO to invest in any company that has investment grade rating from two agencies.

"Our working committee will meet on April 21 and 22 and this issue will be discussed threadbare," he said.

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TUs may soften stand on EPFO's market-related investment plans

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