The retirement fund manager EPFO trustees today decided not to invest a portion of Rs 5,00,000 crore funds in the stock market in view of Finance Ministry’s refusal to provide any guarantee on returns and safety of such investments.
“We don’t want to invest in equities. No futher decision has been taken on this and same status (of not investing PF money in stock market) would prevail,” Labour Minister Mallikarjun Kharge said.
He was speaking to reporters after the meeting of the Central Board of Trustees, the highest policy making body of Employees’ Provident Fund Organisation (EPFO).
“We did not get any guarantee from Finance Ministry on such investment in stock market,” Kharge said, adding there has been no change in EPFO’s stance. EPFO maintains about Rs 3,00,000 crore corpus with a subcriber base of 4.71 crore whereas the provident fund trust managing their employees money themselves manage funds to the tune of around Rs 2,00,000 crore.
Earlier in September last year, the CBT has decided not to invest a portion of EPFO funds in stock markets in view of volatile nature of the equities market and sought guarantee of Finance Ministry on such investments.
In a letter to the Finance Ministry, the Labour Ministry had said that EPFO can invest part of provident fund corpus in the stock market provided the Finance Ministry guarantees safety of the workers’ money.
“… if the investment in the capital market is so good, then there should be no problem for the government to provide a guarantee regarding the safety of the workers’ capital funds and a reasonable rate of return on the capital,” Labour Secretary P C Chaturvedi had said in a letter to the then Finance Secretary Ashok Chawla.
Replying to this, Finance Ministry had categorically said, “There is no question of government providing the sovereign guarantee to any provident fund…government gives no guarantee of safety of returns to any provident fund.”
About ensuring speedy settlement of claims and transfer of accounts, the minister said, “the trustees have decided to complete the digitalisation of records of all subcribers’ accounts by the first week of next month.”
EPFO has digitalised data in its 116 offices. The remaining four offices are in final stages of completing the computerisation process. Kharge also confirmed that board decided to resume investments in LIC Housing Finance which EPFO had stopped in September last after surfacing of a scam in the home loan company.