EPF meeting on Nov10 to decide interest rate

The labour ministry has called a meeting of the Central Board of Trustees (CBT) on November 10 to decide on the Employees Provident Fund (EPF) interest rate for its over four crore subscribers this fiscal.

The meeting, whose ex-officio chairman is Labour Minister K Chandrasekhara Rao, was earlier scheduled for July 30 but was put off and has now been convened for Thursday for also discussing the finance ministry's suggestions for changing the pattern of investment of EPF among other things.

CBT members got the letter dated November 2 for the purpose, which meant that statutory requirement of 15 days was not adhered to for calling such meetings, if they are not urgent.

As per EPF Miscellaneous Provision Act, 1952, each trustee has to be given a notice of not less than 15 days for an EPFO meeting, if it is not urgent.

"What is so urgent that the meeting has been called without adhering to even 15 days notice?" said a CBT member.

In fact, trade union representatives in CBT had earlier called for convening the meeting soon. The finance and investment sub-committee of the EPFO had in September recommended an eight per cent rate for this fiscal.

However, the union representatives in the CBT did not have a consensus on the EPF rate with CPI(M)-affiliated trade union Citu demanding at least 9.5 per cent rate, while Intuc, owing allegiance to the Congress, stated that the rate be at par with the returns on the fund.

Hind Mazdoor Sabha secretary A D Nagpal said a certain minimum rate should be fixed for EPF. The rate could be arrived at after discussion among CBT.

Under no circumstances should EPF rate fall below such level, he said.

Former BMS president and its representative in the CBT Hasubhai Dave said his organisation has not taken any decision on the EPF rate, but it seems that the labour minister would stick to eight per cent rate, as is suggested by the finance and investment sub-committee of the EPFO.

However, a BMS representative had stated in the committee that 12 per cent rate could be easily given, Dave said. "We may demand 12 per cent rate of interest even if it has to be subsidised," he said.

CITU secretariat member W R Varadarajan said his organisation would demand that at least 9.5 per cent EPF rate be given as per "Prime Minister Manmohan Singh's assurance."

According to the CITU leader, the prime minister has assured that the UPA government would not reduce the EPF rate from 9.5 per cent and "we take the assurance for the entire term of the UPA government."

He demanded that the government increase the administered rate of interest on special deposit schemes, where most of the employment provident fund is parked, from the current eight per cent rate, instead of taking help of reserve funds, which were used for meeting the deficit that rose due to 9.5 per cent rate given for last fiscal.

Congress-affiliated INTUC president G Sanjeeva Reddy said the EPF rate should be equal to what is earned from the fund.