EPFO Seeks Trustees Nod To Invest More Funds In Government Bonds

According to the information available when new investment pattern is notified, there was scope of investing additional 15 per cent of EPFO funds.

While adopting the new pattern of investment, it was decided that there will be no investment in equity as of now and this additional 15 per cent was clubbed with the limit for investment in corporate bonds. Thus the investment limit in corporate bonds was fixed at 55 per cent.

In the letter to the Labour Ministry, EPFO said: "...SDLs with internally no risk factor was offering much better return than PSU bonds. EPFO had to invest in corporate bonds despite the lower return associated with them in order to conform to the patter of investment."

EPFO pointed out, "Even IRDA guidelines for the insurance sector allows investment in government securities up to a maximum of 85 per cent of total investments. This flexibility at hand with organisations like LIC empowers it to make investment in the category which gives better yields."

EPFO manages a corpus of about Rs 6 lakh crore with an active subscriber base of about five crore members.

It had received Rs 71,195 crore as incremental deposits from its subscribers during 2013-14, which was 16 per cent higher than Rs 61,143 crore collected by it in the previous fiscal.