To ensure transparency, the Employees' Provident Fund Organisation (EPFO) has decided to appoint a separate custodian for its securities, rather than leave it to fund managers.
The decision to separate the two functions was taken on Friday by the Central Board of Trustees (CBT) of the EPFO after certain doubts were raised about fund managers not handling the securities well so far.
The CBT also decided to put off the appointment of fund managers for the over Rs 3.5 lakh crore retirement corpus till August 31. Till then, the State Bank of India will be the sole manager of the funds.
“New fund managers may even be appointed in July,” the Union Labour Minister, Mr Mallikarjun Kharge, told the media after the meeting.
Sources said the appointment of fund managers was getting delayed as technical bids were opened only on Friday. Financial tenders were likely to be opened only on July 8, they said.
Last year, the CBT appointed four asset management companies – ICICI Pru, HSBC, Reliance Capital and SBI.
In another significant move, the CBT approved major amendments to the EPF & Miscellaneous Provisions Act, 1952.
“A tripartite working group, comprising employee, employer and Government representatives, has been appointed” the on the matter, Mr Kharge said. After discussions, a note will be sent to the Government and then to the Cabinet for final clearance, he added.