2nd may
EPFO to call bids for managing its funds shortly
NEW DELHI: Retirement fund body EPFO has decided to call for bids from assets management companies shortly to manage its huge corpus of Rs 3 lakh crore for three-year period beginning July 1.
"The Employees' Provident Fund Organisation (EPFO) will float tenders during this month for appointment of AMCs for managing funds," a source said.
The source said that EPFO's apex decision making body Central Board of Trustees is expected to take final call on appointment of fund managers in June.
Once the tender is floated, the firms would be given 15 days time to submit their bids. Thereafter EPFO on the advice of the credit rating agency CRISIL engaged for the purpose, would take at least a fortnight to process the bids.
The list of shortlisted asset management companies would be placed before the CBT headed by the Labour Minister to take the final call.
Earlier this year as many as 11 asset management companies (AMC) responded to the expression of interest invited by the EPFO.
In addition to those who had managed the funds earlier, seven new AMCs, including ICICI Securities , UTI Securities and Kotak Securities , have evinced interest to manage the funds.
EPFO had earlier appointed SBI, ICICI Pru, HSBC and Reliance Capital as fund managers in August 2008 and their terms ended on March 31 this year. Before the appointment of the multiple fund managers in August 2008, SBI was sole manager for EPFO funds.
Since the PF body could not appoint multiple fund managers before March 31 this year, the CBT in its meeting on March 30 decided that SBI would manage all its funds for three months period till June 30 as an interim arrangement till the new fund managers are appointed.
One of the reasons for delay in appointment of the fund managers is that the EPFO had sent its tender document to Central Vigilance Commission for vetting to avoid any discrepancy in a situation when scams were surfacing.
The CVC has recently given in-principle approval to the tender document for appointment of the fund managers.
EPFO to pay 9.5% on
claims till new rate is decided
|
| 29 april |
Subscribers of retirement fund
manager EPFO, settling their final claims before the new rate is announced for
the current fiscal, will get the existing 9.5% interest on their deposits.
"Since the rate of interest (on
deposits) for FY11 has been declared as 9.5% per annum, settlement of claims of
the EPF subscribers during FY12 shall be made at 9.5% per annum till rate of
interest is declared for FY12," said an order issued by the Employees'
Provident Fund Organisation (EPFO). The decision will benefit those subscribers
who are either retiring or going in for full and final settlement of their
accounts before the new rate is announced for FY12.
In September, EPFO had announced
9.5% rate of return on deposits for over 4.71 crore subscribers for FY11, which
has been ratified by the Finance Ministry.
The order is contrary to the view of
the Chairman of EPFO's apex decision making body, Central Board of Trustees
(CBT), who wanted to give 8.5% rate for FY12 to all outgoing subscribers
settling claims this fiscal.
CBT, which is headed by the Labour
Minister, had expressed the view of providing 8.5%.
EPFO had been providing 8.5% rate of
return to its subscribers for five years since FY06. It was raised to 9.5% for
FY11 after EPFO discovered a surplus of over Rs 1,700 crore.
According to the Employees'
Provident Fund Scheme, EPFO has to settle claims at the rate provided for the
previous fiscal, in case the rate for the subsequent financial year has not
been declared.
This rule will benefit all those
subscribers who would settle their claims before the announcement of the rate
of return for FY12.
They will retain the gains even if
EPFO announces interest rate lower than 9.5% for this fiscal, but will be able
to claim the difference if the rate happens to be higher.
Finance Minister Pranab Mukherjee is expected to meet Pension Fund Regulatory and Development Authority (PFRDA) chairman Yogesh Agarwal soon to take stock of what is holding the states back.
- Chairman PFRDA
- Is Yogesh Agarwal.
11 Apr, 2011, 02.08AM IST,
Pranab to seek Yashwant's help in PFRDA bill clearance
NEW
DELHI: Finance minister Pranab Mukherjee is likely to reach out to BJP
leader Yashwant Sinha to get an early green signal for the Pension Fund
Regulatory and Development Authority (PFRDA) Bill. Sinha heads the
parliament's standing committee on finance whose nod is necessary to get
the long-pending bill passed.
On hold since 2004, the PFRDA Bill that gives a statutory backing for a pension sector regulator was re-introduced in the Lok Sabha in the recent Budget session.
Conceived when Sinha was finance minister in the Atal Behari Vajpayee government, the Bill had been introduced in the last Lok Sabha, but lapsed with the UPA failing to convince their former allies - the Left parties.
The chairman of the interim PFRDA, which operates under an executive order, said that the government is now keen to get the Bill passed in Parliament's monsoon session.
"The finance minister will speak to Mr Sinha and point out that Bill is his baby, in a way, as it originated in his time as finance minister," PFRDA chairman Yogesh Agarwal told ET. "Mr Sinha will be requested to either not ask for the Bill to be referred to the standing committee or clear it quickly after it's referred," he said.
The Bill was scrutinised by the parliamentary committee on finance in UPA's first innings, before it lapsed. However, technically it has to be seen by the present Lok Sabha before clearance. Mukherjee is expected to point out to his NDA predecessor that all the suggestions of the previous Lok Sabha's standing committee have been incorporated in the present Bill.
A fortnight ago, the BJP had bailed out the UPA on the introduction of the Bill in the Lok Sabha. Congress' floor managers bungled up in ensuring their MPs' attendance while CPM leader Basudeb Acharia moved a division motion - which entails MPs voting on whether a Bill must be introduced at all.
Though Acharia had asked the BJP to support his motion, the party decided to vote with the government, defeating the division motion with 115 votes for the Bill and just 43 against. This marked the first time in recent years when the Congress and BJP came together to push reforms. Though the government expects less resistance from the BJP on financial sector reforms, the opposition party has said it will decide its stand on the content of pending financial bills in May.
BJP spokesperson Prakash Javadekar recently clarified that the party had 'only supported the introduction of the pension bill' and its stand on all pending financial bills would be discussed in May. "We are in favour of right type of financial reforms," he said last week.
Apart from the PFRDA Bill, the government introduced the Banking Laws (Amendment) Bill and a constitutional amendment bill to enable the proposed Goods and Service Tax regime in the Budget session. The government has kept the foreign direct investment (FDI) limits in the pension sector outside the purview of the PFRDA Bill.
This may have been prompted by its experience in the insurance sector. Though it is keen to raise the FDI limit from 26% to 49%, the government has been unable to get the Insurance Laws (Amendment) Bill past Parliament.
On hold since 2004, the PFRDA Bill that gives a statutory backing for a pension sector regulator was re-introduced in the Lok Sabha in the recent Budget session.
Conceived when Sinha was finance minister in the Atal Behari Vajpayee government, the Bill had been introduced in the last Lok Sabha, but lapsed with the UPA failing to convince their former allies - the Left parties.
The chairman of the interim PFRDA, which operates under an executive order, said that the government is now keen to get the Bill passed in Parliament's monsoon session.
"The finance minister will speak to Mr Sinha and point out that Bill is his baby, in a way, as it originated in his time as finance minister," PFRDA chairman Yogesh Agarwal told ET. "Mr Sinha will be requested to either not ask for the Bill to be referred to the standing committee or clear it quickly after it's referred," he said.
The Bill was scrutinised by the parliamentary committee on finance in UPA's first innings, before it lapsed. However, technically it has to be seen by the present Lok Sabha before clearance. Mukherjee is expected to point out to his NDA predecessor that all the suggestions of the previous Lok Sabha's standing committee have been incorporated in the present Bill.
A fortnight ago, the BJP had bailed out the UPA on the introduction of the Bill in the Lok Sabha. Congress' floor managers bungled up in ensuring their MPs' attendance while CPM leader Basudeb Acharia moved a division motion - which entails MPs voting on whether a Bill must be introduced at all.
Though Acharia had asked the BJP to support his motion, the party decided to vote with the government, defeating the division motion with 115 votes for the Bill and just 43 against. This marked the first time in recent years when the Congress and BJP came together to push reforms. Though the government expects less resistance from the BJP on financial sector reforms, the opposition party has said it will decide its stand on the content of pending financial bills in May.
BJP spokesperson Prakash Javadekar recently clarified that the party had 'only supported the introduction of the pension bill' and its stand on all pending financial bills would be discussed in May. "We are in favour of right type of financial reforms," he said last week.
Apart from the PFRDA Bill, the government introduced the Banking Laws (Amendment) Bill and a constitutional amendment bill to enable the proposed Goods and Service Tax regime in the Budget session. The government has kept the foreign direct investment (FDI) limits in the pension sector outside the purview of the PFRDA Bill.
This may have been prompted by its experience in the insurance sector. Though it is keen to raise the FDI limit from 26% to 49%, the government has been unable to get the Insurance Laws (Amendment) Bill past Parliament.
Citizens under the NPS(national pension scheme)
have earned 15% to 20% returns in the last two years. Central
government employees have earned a weighted average return of about
12.4% over the same period.
- PF rate increase to impact firms with own trusts
- The government’s decision to raise the Employees Provident Fund (EPF) rate
to 9.5% this fiscal could hit the bottom line of 3,000 firms running
their own PF trusts. - These trusts may find it difficult to bridge the gap between the actual
income on their PF investments and the mandated rate, forcing them to
dip into their company’s profits to make up for the deficit. - Most trusts do not have any reserves left, as the PF rate has been set
higher than investment earnings for most of the last seven years. The
few firms that have the reserves, are barred from using them to pay
interest to subscribers under new regulatory norms issued by the
Employees Provident Fund Organisation (EPFO) this year. So, the only
alternative with the PF trusts is to seek funds from the parent company.
At an EPFO board meet earlier this month, at least two trustees
expressed concern over company-run PF trusts’ ability to match the 9.5%
largesse from the EPFO. - The EPFO is expected to earn about 8.5% interest on its investments in this
financial year. But it set a 9.5% PF rate after it located some
reserves that had built-up in its poorly maintained records since 1952.
No comments:
Post a Comment