)
Trade unions have decided to oppose a proposal to invest a part of retirement fund body EPFO's huge corpus of Rs 6.5 lakh crore in equity markets.
The trade unions have taken this stand after the Finance Ministry issued a new investment pattern for non-government provident funds, asking them to invest a minimum of 5% of their investible funds in equity or equity related instruments.
The investment in equity and equity related instruments could be up to 15% of total funds as per the press release issued by the Finance Ministry yesterday.
Also Read
"We will oppose any investment in equity or equity related instruments by the Employees' Provident Fund Organisation (EPFO) in view of the volatile nature of the stock markets," Bharatiya Mazdoor Sangh General Secretary Virjesh Upadhyay told PTI.
Upadhyay, who is also a trustee of the EPFO's apex decision making body the Central Board of Trustees (CBT), said, "It is our responsibility to protect and safeguard the money of the poor workers as a trustees of the fund.
"Why would we invest in equity when government does not give us guarantee against any loss due to such investments."
Echoing similar views, All India Trade Union Congress Secretary D L Sachdev said, "We had opposed it earlier also and we will oppose it again. This proposal is not listed on the agenda for the CBT meeting on March 11. But it can come as additional item."
Sachdev, who is also an EPFO trustee, said, "It is up to the CBT to adopt the Finance Ministry investment pattern as it is run by the trust. We will definitely record our protest against any move to investment poor workers money in equity."
Another EPFO trustee and Secretary of Hind Mazdoor Sabha A D Nagpal too opposed any investment of EPFO funds in equity or equity related instruments.
He said, "We have been opposing investment of EPFO funds in equity market and we will oppose it in view of volatile nature of stock market."
The Finance Ministry has been pitching for EPFO funds to be invested in the equity markets to maximise their yields. However, following strong opposition from unions in view of the volatile nature of stocks, the EPFO did not opt for equity investment.
The Finance Ministry had allowed the EPFO to invest up to 5% of its funds in equity in 2005 and enhanced the limit to 15% in 2008.
A notification by the Labour Ministry in 2013 allows the EPFO to invest up to 5% of its funds in money market instruments, including units of mutual funds and equity-linked schemes regulated by the Sebi.
The EPFO has more than 5 crore subscribers across the country. It has provided interest of 8.75% on PF deposits in 2014-15.
