 "Bandaru Dattatreya")
Retirement body Employees’ Provident Fund Organisation (EPFO) will not announce interest rates on deposits with it for 2015-16 at its trustees’ meeting to be held on Tuesday.
“(This) is not a part of the meeting agenda, as of now. The central board of trustees (CBT) will mostly take up EPFO’s administrative issues,” said an official, on condition of anonymity. Government sources said the retirement body was ready to discuss the interest rate for 2015-16 in the Tuesday meeting but labour minister Bandaru Dattatreya didn’t approve listing of the item. “There will be a major organisational restructuring of the EPFO which will be considered in the meeting,” said another official.
CBT is chaired by the labour minister. It also has members from trade unions (TUs), industry representatives and government officials, including the labour secretary. It is the authority to decide on the rates of interest for PF deposits and the investment pattern for the funds. In August last year, EPFO had retained an 8.75 per cent interest rate on the deposits of its 50 million subscribers in 2014-15. The TUs have been demanding a higher rate.
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EPFO is investing five per cent of its incremental corpus in exchange traded funds (ETFs) this year. The Union government had argued that investment in equity instruments would yield a higher rate of return to the subscribers.
A proposal to amend the EPF Scheme, 1952, for engaging e-payment gateway PayGov for collection of PF contributions will be taken up in the Tuesday meeting. At present, only State Bank of India and some other banks are authorised. Employers and employees contribute 12 per cent each of the latter’s income to the EPFO every month.
The trustees will also take an update on its new investment in ETFs. The body is likely to invest Rs 5,750 crore in stock market funds this financial year, as against the earlier plan of Rs 5,000 crore, news agency Press Trust of India had reported on Sunday. This is because EPFO has estimated higher incremental deposits at Rs 1.15 lakh crore in 2015-16, against the earlier projection of Rs 1 lakh crore. EPFO’s investment in ETFs or other equity instruments can go up to 15 per cent of the incremental deposits.
The CBT will also consider a proposal for relaxation in the investment guidelines for private scheduled commercial banks.
INTEREST-FREE MEET
- The Employees Provident Fund Organisation won’t announce interest rates for 2015-16 at its trustees’ meeting on Tuesday
- Sources said EPFO was ready to discuss the interest rate but Labour Minister Bandaru Dattatreya didn’t approve
- In August last year, EPFO had retained 8.75 per cent interest rate on the deposits of its 50 million subscribers in 2014-15
- EPFO is investing five per cent of its incremental corpus in exchange traded funds this year
- The central board of trustees, chaired by the labour minister, is the authority to decide on the rates of interest for PF deposits and the investment pattern for the funds
