Amidst the ongoing slump, Employees Provident Fund Organisation (EPFO), has deferred its plans to withdraw Special Deposit Scheme (SDS) funds worth Rs 53,700 crore and deposit them elsewhere for returns higher than 8 per cent.
The decision was also ratified at a meeting of the Central Board of Trustees (CBT) yesterday, after holding discussions with board members and financial consultants.
"There is no question of withdrawal from the scheme. Markets are at an all time low and under the given circumstances, it will not be safe to withdraw funds from the SDS and deposit them elsewhere," Labour and Employment Minister Oscar Fernandes told PTI.
Fernandes, who is also chairman of CBT said: "There would be no fresh investments to the SDS as decided by the Central Board of Trustees earlier."
Earlier, the minister with a delegation of CBT members had met the Finance Minister for an upward revision of SDS interest rate and said that EPFO funds invested in other schemes reaped better returns.
But the Finance ministry had suggested that the EPFO is free to withdraw the amount (Rs 53,700 crore), constituting about 25 per cent of the EPF corpus, and invest it as per government guidelines.
"Until the markets give some positive signals, it will not be possible to take a call on withdrawal from SDS. Under the circumstances, it will not be wise to withdraw it as suggested alternatives might not assure that much return," said CBT member representing Centre for Indian Trade Unions, W R Varadarajan.
