CBT to fix EPF rate on Jan 15

Written by fe Bureau | New Delhi | Updated: Dec 20 2012, 06:10am hrs
The Central Board of Trustees, chaired by labour minister Mallikarjun Kharge, will meet on January 15 to decide on the interest component for employees provident fund for 2012-13. It could be higher than the 8.25% offered last year.

The CBTs executive committee will on January 14 take a call on EPFO's financial position to offer a better rate than last year, sources told FE.

A senior EPFO official told FE that the rate for 2012-13 could be at least 8.5% but wont go beyond 9% despite pressure from various stakeholders, especially trade unions, to bring the rate closer to the PPF rate of 8.8% or bank fd rate of 9.5-10%.

In March, the finance ministrys decision to pare the EPF rate to 8.25% for 2011-12 after CBTs proposal of 8.6% and previous years rate of 9.5% invited protest from many corners.

While there was speculation that EPFO could even pay higher interest of about 9% by appropriating returns on the R22,000- crore corpus lying in inoperative accounts, officials ruled out such options.

EPFO manages over R4.66 lakh crore of long-term savings of 4.5 crore subscribers under three schemes.