EPFO likely to announce PF interest rate for FY'15 on Tuesday

Written by PTI | New Delhi | Updated: Aug 24 2014, 15:48pm hrs
Retirement fund body EPFO is likely to announce the rate of interest on PF deposits for 2014-15 to its over 5 crore subscribers at its trustees meet on August 26.

The issue of payment of interest rate for 2014-15 is listed on the agenda of the next meeting of the Central Board of Trustees (CBT) which is scheduled on August 26.

The Employees' Provident Fund Organisation (EPFO) had provided 8.75 per cent rate of interest on PF deposits for 2013-14, which was higher than 8.5 per cent paid for the previous fiscal.

According to sources, the EPFO' advisory body Finance, Investment and Audit Committee (FIAC) will meet on Monday to finalise the rate of interest to be paid to subscribers for the current fiscal.

As per the practice, the CBT decides rate of interest on PF deposit for a financial year based on the recommendation of the FIAC. The decision of CBT later requires concurrence of the Finance Ministry.

The CBT is headed by the Union Labour Minister with Minister of State for Labour, Labour Secretary, unionists, employers' representatives and other officers on its board.

Besides interest rate, the trustee would also deliberate on issues, including appointment of consultant for selection of its fund managers, custodian and concurrent auditor besides performance evaluation of selected portfolio managers. The trustee would also constitute the committee for the purpose.

The CBT is likely to retain Crisil as consultant for the third time to engage new fund managers and evaluate their performance for three-year term beginning April 1, 2015.

The FIAC has recommended the name of Crisil Ltd for appointment as consultant to CBT, as per the agenda of trustees' meet scheduled on Tuesday.

The CBT will also deliberate on long term funding with public sector undertakings like power major NTPC. It would take a call on a proposal to invest up to Rs 10,000 crore in secured non-convertible bonds of state-run power producer NTPC starting from the current fiscal under a long term agreement for three years.

In another proposal, EPFO has sought approval of its trustees to invest more funds in government securities, particularly state development loans (SDL), saying they offer better returns than corporate bonds.

EPFO has sought amendment in its investment pattern so as to enhance it in government securities to 70 per cent from existing 55 per cent of funds.

The CBT will also take a decision regarding the extension of the tenure of their custodian Standard Chartered Bank till October 31.