Sensing unstable returns from the capital market,the Central Provident Fund Commissioner (CPFC) has ruled out any possibilities of investing the EPFO money in the equity in the future. We will not take the risk of investment in equity in the capital market as it always gives unstable returns to the investors. We want at least a guarantee as well as a stable income for the investors in the long run. In order to see a smile on their face,we would like to go for the state development loans and bonds of triple-rated companies as well as PSUs, central provident fund commissioner Samirendra Chatterjee said at a seminar on retirement funds here. Chatterjee also clarified that the finance ministry had asked the board to implement the 2008 pattern,but its currently using the 2003 pattern. Keeping it in view,our board of trustees has decided not to invest in the capital market as it is a risky affair for the workers fund. However,in case the government is ready to provide the guarantee of returns,then we can give a second thought, he said. The retirement fund manager EPFO has also asked for a government guarantee to go ahead with the finance ministrys demand of investing up to 15 per cent of its funds in stocks. Chatterjee said that new set of fund managers would be appointed very soon to manage the EPFO portfolios. We have submitted the proposal to the finance ministry and we are waiting for its approval. It might come any moment, Chatterjee said. When asked about the issue of higher pay-out of 9.5 per cent for 2010-11,Chatterjee said,Let me clear the fact that whatever is available to us is also available with the private sector firms. We have already found the surplus of around Rs 1,700 crore when analysed the accounts on accrual-based system. The private sector also has nearly that much surplus and hence it can be possible for them to offer the same rate to the investors too. There are over 3,000 recognised provident fund trusts which manage a huge corpus of about Rs 2 lakh crore. These trusts,which are set up by corporates to manage provident fund of their employees,are required to pay a rate of return that is not less than the rate paid by the EPFO. None of the recognised provident fund has approached us so far with a complaint that they cannot manage 9.5 per cent rate of return for this fiscal, Chatterjee added.
