EPFO board not to discuss rate

The Central Board of Trustees is unlikely to take up the issue of 9.5 per cent interest for employees provident fund (EPF) at its meeting on February 21.

This is because the Election Commission recently sent a stinker to the government, asking why it had announced the new rate at a time when the model of code of conduct was in force.

Sources said the CBT would meet again in early March after the Assembly elections were over. Headed by Labour Minister K Chandrashekhar Rao, the CBT has 42 members with eight representatives of trade unions and employers.

Although Finance Minister P Chidambaram had announced the new rate for three years with retrospective effect, including 2004-05, the CBT's approval is required for the current financial year to make the decision applicable.

The EPF interest rates are decided by the CBT. Such decisions are then conveyed to the ministry of finance which in turn gives the green signal to the labour ministry for notifying the rates.

While the CBT had decided on the new rate for 2002-03 and 2003-04, it had only decided on an interim interest rate of 8.5 per cent for 2004-05.

Among other things the CBT meeting on February 21 will discuss are issues relating to pension funds and provident fund arrears.

In its last meeting, the CBT had asked the government to enhance the interest rate on the special deposit scheme (SDS) in which Rs 53,434.10 crore of EPF deposits had been invested till October 2004. It has also sought permission for reinvesting interest from SDS in SDS itself.