No investments of EPFO money in stock markets: FIC


No investments of EPFO money in stock markets: FIC
New Delhi: Despite the Finance Ministry's request to consider investments in stock markets, retirement fund manager Employees' Provident Fund Organisation's (EPFO) advisory body Finance and Investment Committee (FIC) once again recommended against investing in stock markets. According to a source, FIC's recommendation will be conveyed to the EPFO's apex decision-making body, the Central Board of Trustees (CBT), which is likely to meet next month. The FIC had refused to invest upto 15 percent of its 3 lakh crore corpus in equities in March last year, as per the investment pattern suggested by the Finance Ministry. The CBT in July last year made it clear that it will not invest in equities. In a letter to Labour Secretary P C Chaturvedi last month, Finance Secretary Ashok Chawla had asked the Employees' Provident Fund Organisation (EPFO) to adopt the investment pattern suggested by the Finance Ministry for parking funds in various securities, funds and instruments. These funds are recognized by the EPFO and are mandated to give a return on PF deposits not less than what is given by EPFO to its subscribers. On the risk involved with equity investment, Chawla told that the problem of volatility in assets' returns on equity could be addressed by a lifecycle type investment approach. There has been empirical evidence of existence of equity premium in India, according to him. While FIC's stand against investment in equities may be a safeguard for the money from excessive risk, it also means that people won't be able to grow wealth at a much faster and greater clip.