EPFO board to meet today, slash rate

The Board of the cash-starved Employees Provident Fund Organisation (EPFO) meets here tomorrow amid speculation of a 0.5 per cent cut in interest rate to be paid to its subscribers in the current fiscal.

The present rate of interest being paid to the over 40 million EPF subscribers is 8.5 per cent.

Sources in the EPF said the organisation was facing acute shortage of funds and if the existing rate of 8.5 per cent had to be continued, the EPFO would face a deficit of Rs 450 crore.

However, by reducing the current rate by half a per cent, the EPFO would be left with marginal surplus of Rs 10.25 crore, they said, explaining the ground for a possible reduction in the interest rate.

The Central Board of Trustees of EPF at its last meeting here on December 7 had failed to arrive at a consensus on interest rate for this fiscal because of the financial position.

Trade unions, particularly those affiliated with Left parties, have demanded a 9.5 per cent interest rate, though representatives of employers and state and central government officials are of the view that the rate should be in proportion to the returns on the investments of the fund.

Employees' representatives are angry over the fall in EPF interest rate and have opposed any further cut.