In 2020-21, the EPFO had received Rs 2.18 lakh crore as deposits from its around 6.5 crore subscribers. The amount was around the same at Rs 2.19 lakh crore in 2019-20. Till June this fiscal, the EPFO has received Rs 57,486 crore as contribution from its subscribers.
The Central provident fund commissioner (CPFC) is set to be given powers to decide on early redemption options concerning securities purchased by the Employees’ Provident Fund Organisation (EPFO).
The Central Board of Trustees (CBT) will deliberate on the issue in its meeting in Guwahati during March 11-12.
Former CPFC KK Jalan said, “Such powers should be given to the CPFC. This is because one has to take faster decisions on investments in a volatile market. There cannot be any set rule for investing in or exiting from any investments. Depending upon the situation, one has to take prompt decision.”
Sans the power, an EPFO official said, CPFCs had to seek the CBT’s permission to exercise early exit options even in cases where the investment was not huge, or in cases where early redemption was absolutely necessary.
“Since the CBT does not meet frequently, its permission would often come much later, putting the EPFO’s investment at risk, in various cases,” the official said.
According to its investment pattern, notified by the labour ministry, the EPFO invests 45-65% of its annual incremental accretions in government securities, 20-45% in debt and related instruments, up to 5% in short-term debt instruments, 5-15% in equities and up to 5% in asset-backed, trust-structured and miscellaneous investments.
In 2020-21, the EPFO had received Rs 2.18 lakh crore as deposits from its around 6.5 crore subscribers. The amount was around the same at Rs 2.19 lakh crore in 2019-20. Till June this fiscal, the EPFO has received Rs 57,486 crore as contribution from its subscribers.
The EPFO official, however, cautioned that delegation of the early redemption power on presumption of the market movement might also put the CPFC’s office at risk. It is possible a decision presumed to be the most prudent at one point of time might prove to be otherwise in future. Such instances are not rare in the government’s functioning, he said. “The power should come with a shield to protect the CPFC in such cases if the decisions are bonafide,” he said.
