It is reported that the EPFO in its meeting on 14th January 2014 may decide the Fund Managers for its 5 lakh crore pension funds. At present there are four Fund Managers of EPFO viz. SBI, HSBC AMC, Reliance Capital and ICICI Securities Primary Dealership. These were appointed for a term of three years beginning September 1, 2011.
Before 2008, there was only one Fund Manager, State Bank of India, a PSU. In 2008, three private Fund Managers were included. Only 35% is now with SBI and the rest of the 5 lakh crore is with private FM. Whether the Private Fund Managers will be increasing this time. The chances are high, since the government’s policy is to favour the private more.
Till a Public Sector or Govt. FM is there, there will be competition and better interest. But once the Govt. FM is not there, others will form a cartel and reduce the interest on the funds drastically which will cause serious loss to the pensioners. In my opinion, only Govt. or PSU Fund Managers should be there so that the pension funds will be safe and market variations will not adversely affect it.