Investment guidelines for pvt sector provident trust soon: Govt

NEW DELHI: The Finance Ministry will shortly issue investment guidelines for private sector superannuation funds, 10 months after it issued draft proposals calling for increase in their capital markets exposure.

"We are in the process of finalising investment guidelines for non-government Superannuation Trust Funds," Finance Ministry Joint Secretary (capital markets) K P Krishnanan said at a seminar on financial planning here.

The Finance Ministry in September, 2007, had come out with draft proposals, doubling the capital market exposure for private provident funds, superannuation funds and gratuity funds from existing five per cent to 10 per cent.
Besides, it also proposed to reduce -- from 40 per cent to 35 per cent -- the amount that the funds need to invest in securities issued by the central and the state governments.

These investment guidelines are put as requirement of Income Tax Act by the Ministry, he said. On the corpus of the such funds, he said, there is no centralised data available. The government has started collecting data.
The process of data collection would be completed in the next few months, he added.

Krishnanan also emphasised that there is need for professional management of any corpus including superannuation trust fund of specific size. It is because of the fact such funds are often constituted by trust, they are managed by people whose full time job is not managing money.