Subscribers to employees’ provident fund will get a return of 8.8 per cent for the current financial year, marginally higher than in the past two years, when the interest rate was 8.75 per cent. A decision to this effect was taken by the Central Board of Trustees (CBT) of the Employees Provident Fund Organisation in a meeting here on Tuesday.
AITUC’s national secretary DL Sachdeva said the labour ministry did not favour raising the rate to 9 per cent as demanded by the unions as the CBT was keen to retain the surplus — Rs 670 crore if the EPF rate is 8.8 per cent — keeping in mind that the EPFO’s income from its investments might be less next year given a likely softening of interest rates.
Unions, including RSS-affiliated Bhartiya Mazdoor Sangh (BMS) recorded their “protest” against CBT’s decision.
CBT, whose members include, representatives from the government, employers and employees, would now forward its recommendations to the finance ministry which would notify the rates for the current financial year. Labour and employment minister Bandaru Dattatreya is the head of CBT.
Though EPFO provides the rate of interest from its earnings on investment on formal sector workers’ fund without any assistance from the government, the finance ministry was not in agreement with the idea of raising the rates since it would have a lot of bearings on other savings schemes as well as it has already decided to moderate rates on small savings with effect from April 1.
The income projection of the retirement fund body is upwards of Rs 34,844 crore for the current financial year. The Finance Audit and Investment Committee (FIAC) of the EPFO had last month recommended for a 8.95 per cent rate of interest on PF deposits for the current financial year.
According to FIAC’s estimates, the retirement fund body would still have Rs 91 crore surplus available with 8.95 per cent interest pay out to its subscribers, Rs 673 crore with 8.8 per cent pay out and Rs 479 crore with 8.85 per cent pay out. FE