NEW DELHI: Retirement fund manager EPFO has sought approval of its trustees to invest more funds in government securities, particularly state development loans (SDL) as they offer better returns than corporate bonds.

Employees' Provident Fund Organisation (EPFO) is seeking amendment so as to enhance investment in government securities to 70 per cent from existing 55 per cent of funds, as per the agenda listed for the next meeting of Central Board of Trustees (CBT) scheduled on August 26.

"...for the last six months, it is being witnessed that sovereign bonds particularly the SDLs which have no concern of security are offering better rate of return than many of the corporate instance. This is mainly because there is negligible fresh issuance in corporate market in recent past," EPFO had explained to Labour Ministry in a letter in May this year.

In June, Labour Ministry asked EPFO to submit a proposal seeking changes in the investment pattern after obtaining CBT's approval.

Once approved by the EPFO apex decision making body, the CBT, headed by Labour Minister, the said amendment would be notified by Labour Ministry after due diligence.

After notification of the amendment, EPFO would be able to invest a maximum of 70 per cent and 55 per cent incremental accretions in government securities and debt securities/TDRs respectively.