According to the report, executive functions of EPFO would be moved to state social security boards. It will be fund manager which will declare annual interest rate on PF deposits based on the returns on its investments. The main idea behind the move is to make use of EPFO’s several decades of experience in managing the corpus of over six crore subscribers.
A senior government official told the national daily, “Going forward, the roles will change. While EPFO will become the central board for managing the corpus of social security funds of all states, the latter will be a one point contact for collection and disbursal of social security.” It may be noted that the move requires a significant change in the organisation’s current structure. Professional investment managers will be hired for EPFO going forward.
As of now, five fund manager including SBI, ICICI, Securities Primary Dealership, Reliance Capital, HSBC AMC and UTI AMC manage the corpus of subscribers while EPFO focuses on social security fund collection and disbursement.
The official further told ET that finance ministry will continue to notify the investment pattern for social security corpus. The fund managers at EPFO will make sure that investments are made according to the pattern so that maximum returns are yielded. Aside from all this, the rate of return on investments will be decided and declared by EPFO and states will be bound to implement it or give higher returns.
The government is also planning to set up an autonomous board in all states to collect and disburse all sorts of social security to its works since it is aiming to increase the number of subscribers fivefold. This new system would create one window across the country for all types of social security including medical insurance, maternity benefits and disability cover.
Source: Times New