Workers unions at major port trusts have asked the government to reverse its order allowing the 12 major ports to invest their pension, provident, gratuity and surplus funds in bonds and equities.
“It is one of the very serious and dangerous decision taken by the government,” said T Narendra Rao, general secretary, Water Transport Workers’ Federation of India.
“Investing in equity and equity related instruments would be highly risky and unpredictable in the present economic scenario. Many major ports felt the pinch earlier in investing in UTI bonds and some ports are still struggling to come of out this crisis. Besides these funds are hard earned money of the workers and it is public money,” Rao wrote in a letter written to Shipping Secretary Gopal Krishna.
The hard-earned money of the port workers and pension fund of lakhs of poor pensioners in the port sector, if invested in equities, will entail serious consequences and, hence, require a thorough discussion with all the stakeholders, including Major Port Workers Federations, before taking such drastic decisions, Rao said while urging the Ministry to withdraw the directive issued to the Major Port Trusts “in the interests of the industry, workers and port pensioners at large”. Interestingly, a press statement issued by the Shipping Ministry on treasury investment of major ports on July 31 had omitted pension funds from the list, potentially to mislead the workers unions and check their wrath against the decision, says Rao.
However, the order issued by the Shipping Ministry in this regard on 27 July includes pension funds also. Accordingly, for treasury investments of pension, provident and gratuity funds, the major ports will now follow the guidelines framed by the ministry of labour and employment for such investments.
Between 45 and 50 per cent of such funds will have to be invested in government securities, another 35-45 per cent in debt and related instruments, 5-15 per cent in equities and related instruments (shares listed on BSE/NSE with a minimum market cap of 5,000 crore, mutual funds regulated by SEBI with minimum 65 per cent corpus in publicly traded stocks on BSE/NSE and various exchange traded funds regulated by SEBI).
Besides, 5 per cent of such funds can be invested in mortgage-backed securities, Infrastructure Investment Trusts and securities issued by Real Estate Investment Trusts regulated by SEBI.
For surplus funds, the major ports will be guided by the norms issued by the Department of Public Enterprises for such investments by central public sector undertakings. These includes treasury bills, Government of India securities, term deposits in nationalised banks, instruments issued by nationalised banks and mutual funds (up to 30 per cent of available surplus funds can be invested in SEBI regulated public sector mutual funds having AAA rating and minimum corpus of 1,000 crore).