EPFO trustees to take a call on investments in equities on December 19

The move comes at a time when the traditionally risk averse organisation is trying to improve its returns

By: ENS Economic Bureau | New Delhi | Published:December 6, 2014 3:28 am

As the stock markets touch record highs, the Employees’ Provident Fund Organisation (EPFO) has put up a proposal to invest 5 per cent of its Rs 6.5 lakh crore corpus in equities.

The EPFO’s apex decision making body — the Central Board of Trustees will take a final call on the issue when it meets on December 19. “We will deliberate on the issue in the next meeting,” said labour minister Bandaru Dattatreya, who also heads the CBT, on Friday. The move, which would release over Rs 30,000 crore to the stock market, comes at a time when the traditionally risk averse organisation is trying to improve its returns. For 2014-15, the EPFO has announced an interest rate of 8.75 per cent despite demands by trade unions that it should match the rate of inflation.The EPFO, which is the second largest financial institution in the country after the Life Insurance Corporation, has till now been investing only in government securities and corporate bonds and has been looking for more investment options.

While the finance ministry has been pushing the EPFO to invest in equities for long, the issue was finally taken up by some trustees, particularly trade union leaders at a meeting with former labour minister Narendra Singh Tomar in October this year.

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