Mumbai: Casting doubts over the exposure of Infrastructure Leasing and Financial Services (IL&FS) bonds, the Employees’ Provident Fund Organisation’s (EPFO) board of trustees plan to examine the impact of defaults by the central body on the retirement savings of millions of salaried individuals. The meeting underlines the government’s attempts to make sure IL&FS developments have no effect on the retirement funds of its subscribers.
“We are meeting at the end of February, taking stock of the situation both at the EPFO and exempted trust levels,” said Prabhakar Banasure, an employee representative at EPFO’s Financial Investment Audit Committee and a member of the central board of trustees.
Retirement funds will not be impacted
“We will not allow any retirement body investments in IL&FS to go bad. It is the money workmen have toiled to earn,” Banasure said.
The Provident Fund interest rate rose from 8.55 percent to 8.65 percent in 2018 in the last meeting, central provident fund commissioner Sunil Barthwal told the board.
The EPFO had invested Rs 570 crore in IL&FS debt securities in 2008. Standalone PFs are expected to have IL&FS investment ranging between Rs 15,000-20,000 crore.
The IL&FS had defaulted on payments in the past four months, setting off a cash squeeze among non-banking finance companies. “There is no default (for EPFO) … Till January we have received interest payment,” said Banasure. He added that the apex body is now waiting for payment for this month.