Home > Finance > EPFO to hire consultant to monitor  bond investments

EPFO to hire consultant to monitor  bond investments

60 Views

The Employees’ Provident Fund Organisation (EPFO) has proposed to hire a consultant to monitor its bond investments after struggling to recover nearly 1,400 crore sunk into Infrastructure Finance and Leasing Ltd (IL&FS) and Dewan Housing Finance Corp. Ltd (DHFL) that later went bankrupt.

In a report presented in the Rajya Sabha on Friday, the parliamentary standing committee on labour said it accepted the EPFO proposal, even as it criticized it for delaying the step to safeguard statutory social security deposits of its subscribers.

“The committee appreciates that in order to make the process of review more stringent, the central board, EPF, has recommended for appointment of a third-party consultant in addition to the existing one,” the report said.

“In view of the imperatives involved in establishing a stronger monitoring mechanism, the committee trust that the third party consultant should have been appointed by now, so as to ensure a robust performance review of the investments made, which in turn, would assure safe and prudent investment of the corpus,” said the committee headed by Biju Janata Dal parliamentarian Bhartruhari Mahtab.

A board member of the EPFO said on condition of anonymity that the retirement fund body seems to have erred in its duty to act in time and protect workers’ money.

In 2019-20, before the coronavirus outbreak, the labour ministry had proposed that EPFO get the first right to a company’s assets going bankrupt.

It even proposed two categories of companies for such priority payment—the first are those companies where EPFO has invested, such as IL&FS and DHFL; while the second are those that owe employees money as part of their EPFO obligations.

However, the proposal did not make headway, and almost 574 crore in IL&FS and around 800 crore from DHFL remain out of EPFO’s reach.

“I am not very sure if EPFO executives are serious about getting that money back. The general sentiment in EPFO is it’s a relatively small corpus when compared with the deposits they get. But what they forget is EPFO is not a private for-profit business house, and you can let go of some funds,” the board member cited above said. “IL&FS- and DHFL-like incidents tell us that we failed to act in time,” the member said, adding that the investment finance committee of the EPFO has deferred its meeting in recent months at least twice.

The panel report said, citing the ministry, that all EPFO funds are invested strictly through the appointed portfolio managers as per the investment pattern.

“In order to have a proper evaluation and audit of the investments made, EPFO has appointed some agencies as a consultant to carry out regular performance evaluation and provide research-based reports; a concurrent external auditor to conduct an audit of the investment transactions; a custodian to monitor the timely receipt of interest and maturities of investments,” the report said.

An EPFO official said they are in touch with concerned authorities in markets regulator Sebi and dispute resolution bodies to get back retirement fund dues from these firms.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint.
Download
our App Now!!

Source link

TAGS , , , ,
Hi guys, this is Kimmy, I started LicensetoBlog to help you with the latest updated news about the world with daily updates from all leading news sources. Beside, I love to write about several niches like health, business, finance, travel, automation, parenting and about other useful topics to keep you find the the original information on any particular topic. Hope you will find LicensetoBlog helpful in various ways. Keep blogging and help us grow as a community for internet lovers.