New Delhi: Retirement fund body EPFO is likely to appoint fund managers tomorrow for a three year term from 1 April and raise age limit for vesting of pension by two years to 60.
Both the proposals will be taken up for discussion and approval by the Employees' Provident Fund Organisation's apex decision making body - Central Board of Trustees (CBT) - as per the agenda listed for the meet.
Asset management firms ICICI Securities Primary Dealership, Reliance Capital AMC and HSBC AMC have emerged as top bidders for managing huge corpus of the EPFO.
However, as many as six firms have qualified in technical as well as financial bids for managing EPFO funds. Though SBI had also submitted its bid, the CBT has already nominated it as fund manager for another term and will approve its appointment at the meeting tomorrow.
As per the agenda listed for the CBT meet, ICICI Securities Primary Dealership has been ranked as top bidder on the basis of technical and financial parameters followed by Reliance Capital AMC and HSBC AMC.
The other shortlisted bidders are UTI AMC followed by ICICI Prudential and Birla Sun Life AMC.
EPFO manages a corpus of Rs 6.5 lakh crore. The funds are being managed by SBI, HSBC AMC, Reliance Capital AMC and ICICI Securities PD. The term of these fund managers ends on 31 March 2015.
EPFO has a subscriber base of over five crore and receives over Rs 70,000 crore as incremental deposits every year. During the current financial year, EPFO's incremental deposits are estimated to be Rs 79,000 crore.
CBT, headed by the Labour Minister, will also consider a proposal to raise age limit from 58 to 60 years for vesting of pension under the Employees' Pension Scheme (EPS-95).
At present, a formal sector worker covered under the EPS-95 can make contributions towards pension scheme till the age of 58 years and can claim pension after that.
Raising the age limit would reduce the deficit in pension fund and would increase the pension benefits of members as there would be two additional years of service, as per the agenda listed for the meeting.
As per a report of valuer on EPS-95, increasing age limit would reduce shortfall in pension fund by Rs 27,067 crore.
It is also proposed by to increase the short service pension entitlement age from 50 years to 55 years. This measure would reduce the shortfall in pension fund to the extent of Rs 12,028 crore.
At present, members can ask for fixing pension at he age of 50 years provided they have served for at least 10 years.
It is also proposed that the pensionable salary should be determined on the basis of 36 months average wages immediately preceding the date of exit from the scheme in place of existing 60 months.
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Updated Date: Feb 18, 2015 19:16:46 IST