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| EPFO decision on entering stock mkts likely by Dec 5 |
| Press Trust of India / New Delhi Nov 17, 2009, 17:48 IST |
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If the Finance and Investment Committee (FIC) of the Employees Provident Fund Organisation (EPFO), scheduled to meet here on December 1, takes a final call on investing a portion of its massive corpus in the capital markets, as much as Rs 13,000 crore could flow into equities.
The FIC meeting will decide on whether to park a portion--to the tune of three to five per cent--of the fund's corpus of Rs 2.71-lakh crore, into the equities markets. If the FIC gives a go ahead, its recommendation will go to the Central Board of Trustees (CBT), the apex body of the EPFO.
The CBT is likely to meet and decide on the issue at its meeting scheduled for December 5. Generally, the CBT upholds the FIC's recommendations.
"The FIC would meet on December 1 to firm up views on investing three to five per cent of the EPFO corpus in the stock markets," sources in the Labour Ministry said.
"The CBT meeting has also been scheduled on December 5 and is likely to take a call on the issue of investment in stock markets," they added.
The issue has been in debate for quite some time now. Earlier, the FIC had met on October 8 to decide whether to invest some of its funds in the stock market, but remained inconclusive and it was decided that members would meet again on October 24.
Since there was no unanimity of views in the FIC, it was decided to have a meeting of the representatives of both employees as well as employers an hour ahead of the October 24 meeting. However, that meeting was later postponed.
The CBT had referred the matter to the FIC on July 4. At that meeting, Labour Minister Mallikarjun Kharge, his deputy Harish Rawat and trade union representatives expressed reservations about permitting the EPFO to park part of its funds in the stock markets.
All of them were of the view that it is not proper to invest retirement funds into risky instruments. Kharge who also heads the CBT asked the FIC to come back with a detailed presentation and with more clarity.
Since there were apprehensions over investing money in shares, an EPFO official suggested at a meeting on August 18 to instead look into the matter of parking these funds in stock indices.
The FIC at its December 1 meeting would now form views on this issue.
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