By now India should have been in the middle of restructuring social security. But look where we are stuck. The pension Bill that allows some measure of employee choice on post-employment financial security is rotting. And Employees Provident Fund Organisation (EPFO) is in a rut. The reconstituted EPFO board meets this Saturday in the backdrop of contradiction and confusion that would have been amusing had not the stakes been so high. The finance and investment committee (FIC) of EPFO had in 2005 finally agreed that SBI?s monopoly as its fund manager shouldn?t continue. But finance professionals first tapped to act as consultants in this process were ex-SBI chairmen. Both gentlemen having properly refused the offer, matters went back to square one. A panel was formed in November last year and in April this year, EPFO asked for bids from fund managers. So, three years were eaten up simply operationalising the first step. But now CITU leader and FIC member WR Varadarajan has said private sector fund managers are not welcome. Shouldn?t that have been made clear when bids were invited? And how does that sit with EPFO?s years-long dissatisfaction with SBI?s role as fund manager? If the country?s biggest public sector bank hasn?t made EPFO happy, why reform fund management by inviting only public sector fund managers? Plus, Varadarajan as a member was party to all FIC decisions. How can he move the goalposts without formally discussing it with the committee?
That?s not all: EPFO had asked for an independent audit of SBI?s fund management performance. The auditor apparently hasn?t found SBI to be as wanting as EPFO and FIC are convinced the bank is. So the auditor is now in bad odour with EPFO. That makes the situation even more bizarre?the EPFO is unhappy with an auditor it appointed because its assessment isn?t backing the reform it wants but EPFO board members themselves aren?t sure about the extent of reform. Also to be noted is that SBI, along with being EPFO?s sole fund manager, is also its sole banker. How the introduction of competition in choosing EPFO fund managers will work out isn?t clear now, far less the question about how better to bank EPFO?s corpus. What is clear is this: that there should be such uncertainty approaches a scandal.