NEW DELHI: The Employees Provident Fund Organisation (EPFO) has written to the Finance Ministry and Ministry of Corporate Affairs, seeking help in protecting the retirement funds of a large number of people, which is stuck with the debt-ridden IL&FS.
Even while Central Provident Fund Commissioner Sunil Barthwal claimed that the exposure is very less, sources claimed that the EPFO has invested about Rs 570 crore in IL&FS bonds. Though it is less than 0.1 per cent of the `8 lakh crore assets under its management, thousands of crores of rupees have been invested by privately managed provident fund trusts.
“This is retirement fund and can cause lot of negative sentiment, given that Il&FS is defaulting on payments after payments. This is a matter of concern as the government would not like any such trouble around the election period,” a senior MCA official told this publication.
There are over 1,500 companies, both private and public, that are exempted from putting their retirement funds with the EPFO and are allowed to set up and operate their own in-house PF trusts. These include PF trusts of state electricity boards, public sector undertakings and banks.
The Finance Ministry has already said these bonds do not carry any government guarantee and all such instruments face market risks.