EPFO retains CRISIL as consultant for engaging fund managers

The Employees' Provident Fund Organisation (EPFO) trustees today decided to appoint CRISIL as consultant for the second time to engage fund managers and evaluate their performance for three-year term beginning April 1, 2011.

"We have decided to appoint CRISIL as our consultant for engaging fund managers and monitoring their performance," Labour Minister Mallikarjun Kharge told reporters after the meeting of the Central Board of Trustees (CBT).

The CBT is the apex decision making body of the EPFO and is headed by Union Labour Minister.

CRISIL was appointed as consultant for the first time for appointing as well as monitoring fund managers' performance in 2008 by EPFO.

EPFO had appointed four fund managers in August 2008 including HSBC AMC, ICICI Pru, Reliance and SBI for managing its huge corpus over Rs 3 lakh crore for a three term expiring on March 31, 2011.

The board also approved constituting a committee to be headed by Kharge which would work in consultations with CRISIL to appoint fund managers by the end of current fiscal.

The committee which would have representation of employers, employees, EPFO and Labour Ministry is likely to be constituted by December end.

EPFO had invited proposals from four credit rating agencies, including CRISIL, Fitch, ICRA and CARE. Fitch did not participated in the process, while ICRA and CARE were rejected as they did not have requisite experience.

EPFO wanted a consultant having experience in appointing fund managers as well as monitoring their performance. Although ICRA had experience of appointing fund mangers, it lacked expertise in monitoring their performance. In case of CARE, the agency had no experience in appointing fund managers.