The Hindu Business Line : EPFO defers transfer of funds to new managers

The decision to bring in new fund managers was taken at a special meeting of the CBT held on July 29 by majority decision amid protests from all the trade union representative members on the board.

Ambarish Mukherjee

New Delhi, Sept. 8 The Employees Provident Fund Organisation (EPFO) that had appointed three new private sector fund managers last month has postponed transfer of funds to the newly appointed fund managers.

“Earlier we had been trying to complete the process by September 1 but due to various internal reasons the transfer would be delayed by some more days,” senior EPFO officials told Business Line.

Trade union sources said that the decision to delay transfer had come in the back drop of a number of questions raised by labour leaders who are members of the Central Board of Trustees (CBT) of the EPFO.

Last month three new asset management companies (AMCs), namely, HSBC AMC, ICICI Prudential AMC and Reliance Capital AMC were inducted as new fund managers along with the erstwhile fund manager State Bank of India (SBI).

The decision to bring in new fund managers was taken at a special meeting of the CBT held on July 29 by majority decision amid protests from all the trade union representative members on the board.

Now another special meeting of the Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) has been convened on September 18 following the appointment of new fund managers.

Trade Union leaders who are members of the CBT said that “we have been intimated about the date for the special meeting but have not received the detailed agenda for the meeting till Friday.”

They said that the agenda for the meeting is expected in next two to three days.

According to the draft minutes of the last CBT meeting, apart from opposing appointing private fund managers during the meeting, the trade union representatives had also strongly highlighted that the SBI was not giving any interest on the portion of idle funds lying with it.

Interestingly, sources told Business Line that the exact amount of interest receivable by the EPFO from the SBI on account of idle funds (lying with the bank for the interim period between the date on which provident fund contributions are credited to SBI account and the date on which the bank actually invests) was not available with the provident fund body.

Crisil, which was appointed consultant by the EPFO to recommend fund managers based on certain predetermined technical and financial parameters, also appears to be in the dark on funds with the SBI.

The Crisil representative in the last CBT meeting had said that he did not have the exact figures about SBI, according to the minutes of the meeting.

Representatives from major trade unions had also expressed serious apprehensions during the meeting that SBI had been dumping junk bonds on EPFO and taking away cream of the bonds for their own benefits.

The coming CBT meeting will also take up administrative issues such as cadre restructuring and employees remunerations in the backdrop of the sixth pay commission report for Government employees.