The apex body managing coal workers provident fund CMPFO, with a massive Rs 65,000 crore corpus, has for the first time decided to invest in equity and has roped in SBI Mutual Fund for it.
The Coal Mines Provident Fund Organisation has selected SBI (PMS division), ICICI Securities Primary Dealership and Reliance Capital Asset Management as fund managers for its Rs 65,000 crore corpus of pension money belonging to 4.5 lakh coal workers.
"CMPFO Board has for the first time decided to invest in equity as per the 2015 guidelines from the Ministry of Finance and accordingly SBI Mutual Fund has been selected for it," CMPFO Commissioner Animesh Bharti told PTI.
Bharti said the CMPFO Board has selected SBI (PMS division), RCAM and ICICI Securities Primary Dealership to manage about Rs 65,000 crore pension fund of coal workers.
When asked about the amount to be invested in equity, Bharti said, "It will be 5 per cent on daily accrual basis. Roughly it will work out to Rs 500 crore annually at the present level of investment".
"CMPFO has allotted 35 per cent of corpus SBI PMS and 30 per cent each to ICICI Securities Primary Dealership and Reliance Capital Asset Management. The remaining 5 per cent has been given to SBI Mutual Fund," he added.
The agreement in this regard will be signed in the last week of October, he said, adding that the companies will start managing funds beginning November 2.
CMPFO is an autonomous organisation governed by a Board of Trustees and functions under the overall supervision of Ministry of Coal, Government of India.
Currently CMPFO administrates Coal Mines Provident Fund Scheme, Coal Mines Family Pension Scheme (merged with Pension Scheme in 1998), Coal Mines Pension Scheme and Coal Mines Deposit Linked Insurance Scheme.
CMPFO had invited two rounds of bids from MF companies - technical and financial. Post due diligence and applicability of eligibility norms SBI, UTI, ICICI and RCAM had participated in the financial bid in second round.
The financial bids were opened in June 2015 and the decision on selection was taken in Board of Trustee meeting held on September 29, 2015.
On the selection, Sundeep Sikka, CEO, Reliance Capital Asset Management said, "RCAM is happy to be the only AMC to be managing all three government funds - EPFO, NPS and now CMFO - and thanks the government for their trust in our brand and performance. With this mandate we further strengthen our position as the largest asset manager in India."
A Parliamentary panel had earlier flagged the issue of the CMPFO not parking its funds in "an appropriate manner" and had even suggested referring the matter to a central investigating agency.
