The proposal was first mooted by the finance, investment and audit committee, a senior government official told ET. “It is proposed to have two consultants, one focussing on debt side and the other on equity side and research and for that purpose a committee is proposed to be constituted,” the official said.
“EPFO will kick-start the process of appointing consultants once the recommendations of the committee are accepted,” the official added.
A member of the central board of trustees of EPFO told ET on the condition of anonymity that appointment of two consultants instead of one has been a long pending requirement for EPFO whose portfolio has diversified over the years.
“There will be sufficient checks and balances in place under the new system while it will reduce EPFO’s dependence on a sole consultant. This is important as EPFO deals in high-value investments,” the CBT member added.
The tenure of the incumbent consultant CRISIL had come to an end on February 5 following which it has been given an extension till the time a new consultant is appointed and brought onboard. An EPFO consultant is responsible for selection and evaluation of portfolio managers and acts as a custodian and concurrent auditor for the retirement fund body.EPFO manages investments of over Rs 18 lakh crore and witnesses a year-on-year increase of over Rs 1.5 lakh crore with 38% of it is in state development loans (SDLs), 16% each in central government securities and corporate bonds, 11% in public accounts with central governments and nearly 10% in exchange traded funds.
Its current subscriber base is nearly six crore and the plan is to take it up to 10 crore over the next five years which would lead to substantial increase in investments.
Asset management companies UTI AMC and SBI Mutual Fund have been EPFO’s fund managers since 2019. As per the performance report for 2021-22, the portfolio managers generated a yield of 7.20%, which was higher than the benchmark yield of 6.95% for that year.