EPFO extends deadline to hire fund managers

New Delhi, June 24 (PTI) Retirement fund body EPFO today decided to extend the deadline for appointment of fund managers to manage its huge corpus of over Rs 3.5 lakh crore to August 31, 2011.

"The EPFO's apex decision-making body, the Central Board of Trustees (CBT), decided to extend the time line for appointment of multiple fund managers to August 31 from existing June 30 this year. Till then, SBI will manage its fund as an interim arrangement," a source said.

The EPFO had to appoint multiple AMCs by June 30, so that the newly appointed managers could take over its fund by July 1 for a three-year period, as desired by the CBT which is headed by the Union Labour Minister.

EPFO has already missed a deadline of March 31 this year, the day on which the term of four fund managers, including ICICI Pru, HSBC AMC, Reliance Capital and SBI expired. It had planned to appoint new fund managers for next three financial yeas beginning April 1.

Since EPFO could not appoint new AMCs well in time, the CBT in its meeting on March 30 this year decided that SBI would manage its entire corpus for a three-month period ending June 30 as an interim arrangement.

On June 6, giving reasonable time for submitting technical and financial bids, the EPFO had asked the 10 AMCs who had earlier evinced an interest in managing its funds to submit their bids by June 24.

While the technical bids opened today, the financial tenders would be opened on July 8. Therefore, the appointment of AMCs by EPFO is not possible by this month-end.

Besides the four AMCs who had managed EPFO corpus, seven new firms, including Kotak Securities, Securities Trading Corporation of India, UTI Securities and ICICI Securities, have expressed interest in managing the retirement fund corpus.

The EPFO had appointed the four fund managers for the first time in July, 2008, with the objective of providing a better rate of return on deposits to its 4.72 crore subscribers.

Prior to this, SBI was the sole fund manager for it since its inception in 1952.