People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 01

January 06, 2008




THE Employees' Provident Fund (EPF) Organisation is at present following the investment pattern, as under, notified by the ministry of labour, as per directions of the finance minstry, during 2003:


1. Investment in securities issued or guaranteed by central governmnet 25 per cent

2. Investment in securities issued or guaranteed by state governmnets 15 per cent

3. Investment in bonds issued by Public Sector Units/ Financial Institutions 30 per cent

4. In any of the above 30 per cent


The notification, however, gave an option that the Central Board of Trustees (CBT), EPF may at their discretion invest one-third of 4 above (i.e. 10 per cent) in private sector bonds or shares. The CBT had unanimously decided not to invest in private sector bonds or shares.


The ministry of finance issued a draft Investment Pattern on Septemeber 10, 2007 to be followed by the Non-Government Provident Funds, Superannuation Funds. Following changes have been suggested therein:


This changed (draft) investment pattern was discussed in the Finance and Investment Committee of the CBT, EPF on November 19, 2007 and later in the meeting of the CBT on December 6, 2007. These meetings decided unanimously to turn down the changes proposed by the finance minstry. The CBT decided to communicate to the finance minsitry the following specific responses:


* Minimum total quantum of investments in government securities (central & state) should not be reduced to 35 per cent and should remain at 40 per cent.

* Regards investments in Rupee bonds issued or securities guaranteed by multilateral funding agencies, it was decided to not to accept the proposal of allowing investment in securities guaranteed by multilateral funding agencies, as further clarifications are needed regarding the nature of these instruments/their guarantees.

* Trading of government securities to be made only optional and not mandatory.

* Investments in equities should remain optional up to 5 per cent  only as in the previous pattern issued in 2003.


The CBT further recommended treating the category-wise percentage norms as only indicative and not mandatory and for doing away with any floor in any single category. The CBT had also recommended for allowing investments in National Savings Certificates (NSCs) and Post Office Term Deposit Receipts (POTDRs). These are at present not included.