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CBT to fix EPF rate on Jan 15

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SummaryThe 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.

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 CBT’s 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 won’t 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 ministry’s decision to pare the EPF rate to 8.25% for 2011-12 after CBT’s proposal of 8.6% and previous year’s 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.

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