EPFO begins appointment of fund managers

The Employees' Provident Fund Organisation (EPFO) has kicked off the process of appointing fund mangers for its huge corpus of over Rs 3 lakh crore, for a period of three years starting April 1, 2011.

"We have decided to invite Expression of Interest (EoI) from four credit rating agencies, who will help EPFO appoint fund managers and also monitor their performance for three years (starting April 1, 2011)," said an EPFO official.

He said the decision to invite EoIs, at the earliest, from the rating agencies, Crisil, Fitch, ICRA and CARE, was taken at the five-member committee of EPFO yesterday.
    
The official added that the panel was mandated to invite EoIs from agencies that have been accredited by market regulator Sebi, and have a minimum of 10 years of operations in the country.
    
The successful bidder will be required to provide consultancy assistance to EPFO for appointment of fund managers, besides evaluating their performance on quarterly basis.
    
Under the present contract, which will expire on March 31, 2011, Crisil is evaluating the performance of fund managers on quarterly basis.
    
Crisil had also assisted the EPFO to appoint the four fund mangers ICICI Pru, HSBC, Reliance Capital and SBI in August 2008. The term of all these four fund mangers too would expire on March 31, 2011.
    
EPFO's apex decision making body Central Board of Trustees (CBT), headed by Labour Minister, had decided at its meeting on September 15, to constitute a five member committee with one each from employees' and employers' representative.
    
The other three members were to be nominated by Central Provident Fund Commission, which include Financial Advisor and Chief Accounts Offices (EPFO) Abhay Kumar Singh and Regional Provident Fund Commissioners K L Goyal and Shyam Sunder.
    
The panel is expected to appoint the consultant by November 30. The credit rating agency would then call bids from fund mangers by December 31, which would be opened by January 31.
    
The short listed fund mangers' name would be sent to EPFO's advisory body Finance and Investment Committee (FIC). The recommendations of FIC in this regard would be placed before CBT in February which are generally upheld by trustees.