Decision on the issue of raising EPF's equity exposure from the current 5 per cent to a higher level within the overall 15 per cent cap could not be taken at the CBT meeting on Friday as the government decided to have a wider consultation among members on the issue. (Photo: Reuters)
Higher equity exposure of your retirement money held in Employee’s Provident Fund (EPF) seems to be a matter of time with central trade unions, who are strongly opposed to the move, hopelessly outnumbered in the Central Board of Trustees (CBT), the highest decision making body of the Employees’ Provident Fund Organisation (EPFO).
Decision on the issue of raising EPF’s equity exposure from the current 5 per cent to a higher level within the overall 15 per cent cap could not be taken at the CBT meeting on Friday as the government decided to have a wider consultation among members on the issue. Equity exposure of EPF is through exchange-traded funds (ETFs). The government has said the issue could be on the agenda of the next CBT meeting.
As CBT’s composition stands today, only 10 members out of the 42 are representatives of central trade unions. The remaining members are from central government, state governments and employers’ representatives. Senior labour union representatives told FeMoney that if the issue comes to voting their voice will be in minority.
“All central trade unions in CBT are against the move to hike equity investment level. We have always been against equity investment. However, our voice is limited. We have just 10 members in the 42-member CBT. If it comes to voting on the issue, we will be outvoted,” D L Sachdeva, General Secretary, All India Trade Union Congress (AITUC), told FeMoney.
Vrijesh Upadhyay, National Secretary, Bharatiya Mazdoor Sangh, echoed similar sentiments. “We had opposed even the 5 per cent equity investment limit. However, it came to voting and lost. Our numbers in CBT are against us,” Upadhyay said. Incidentally, BMS has close links with the ruling Bharatiya Janata Party.
According to reports, in last week’s CBT meeting the government apprised members on the investment returns on equity component so far which showed a return of 7.45 per cent on the Rs 7,000 crore invested in stocks.
Labour Minister Bandaru Dattatreya held that equity investment would be good for the long run and would create a healthy corpus. He pointed out it was also in line with global trends.