new delhi the employees provident fund organisation epfo has shortlisted seven private sector firms to manage its corpus of rs 240000 crore in march 15 financial institutions had applied to manage epfos funds ten firms have cleared the technical bids the financial bids will be opened next weekepfo has three slots open for fund managers every year the fund size increases by around rs 20000 crore the names of successful fund managers both private and public sector will be announced by september this year the next meeting of the central board of trustees cbt expected to be held in august is likely to discuss the contentious issue of introducing multiple but primarily private sector fund managers the private asset management companies in the race include reliance hdfc icici prudential templeton hsbc the tatas sundaram bnp paribas amc and uti amcwe need fund managers even though we invest in debt products debt products like bonds are tradeable and we require expertise to trade intelligently to maximise returns epfo sources asserted despite trade union opposition to the entry of private fund managers defending the decision to allow private sector fund managers they emphasised if we limit the business to psu players there will be no competition these fund managers however will manage only the incremental contributions yearonyearaccording to some projections if private pension funds are included the corpus will rise to around rs 190000 crore in three years epfos corpus will also be roughly around the same at that point after that the corpus of private pension funds will rise dramatically overshadowing the epfo completely thus if the corpus is managed effectively with transparent record keepers and a more relaxed investment portfolio the epfo will be able to earn better returnsinterestingly the applicants for the fund mangers include state bank of india which has been the sole fund manager for the epfo for decades but has come under stringent criticism for its poor fund management not surprisingly epfo has found it extremely difficult to pay even 85 interest returns on investments made by sbi only allowed 825 interest payout at a deficit of rs 26378 crorethe finance and investment committee of the epfo then appointed an auditor to go into active mismanagement of funds by the sbi and a verdict on the auditors september report clearing the sbi of related charges is awaited from the institute of chartered accountants of india icai another psu bank that applied was the punjab national bank a substantial portion of the epfos corpus is invested in the special deposit scheme sds which earns only 8 interest rate