Decision on investing EPFO funds in stock market deferred

The Finance and Investment Committee, the key advisory body of the Employees' Provident Fund Organisation (EPFO), today deferred a decision on investing EPFO funds in the stock market.

The FIC, according to sources, will take a final view on parking 3 to 5 per cent of the EPFO's lager corpus of funds totaling Rs 2.57 lakh crore on October 24.

It was also decided that representatives of the employees and employers would meet for an hour before the October 24 meeting of the FIC.

The decision to investment small portion of corpus in equity or other instruments would have resulted in about Rs 13,000 crore flowing into the capital markets.

Ahead of the meeting, several trade union representatives had expressed their reservations about permitting EPFO to park part of its funds in the stock market and argued that it was not proper to invest retirement funds in risky instruments.

At an earlier meeting of the FIC on August 18, an EPFO official had suggested that the organisation could look for investment in stock indices.

The finance ministry had first mooted the idea of investing 15 per cent of the EPFO corpus in equity to increase returns on investment.