The Hindu : Front Page : EPFO favours retaining interest rate

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Friday, Jan 25, 2008
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EPFO favours retaining interest rate

Aarti Dhar

NEW DELHI: The Central Board of Trustees of the Employees Provident Fund Organisation (EPFO) on Thursday recommended retaining the 8.5 per cent rate of interest on the Employees Provident Fund for the year 2007-08. This involves a deficit of Rs. 264 crore for the organisation.

The Left-backed trade unions had sought hiking the rate to 9.5 per cent in the wake of higher returns from investments.

“Sustainable rate”

After considering the facts, the Board noted that 8.5 per cent could be declared as a “sustainable rate,” according to an official spokesperson. It was a majority decision.

The recommendation will be sent to the Union Labour Ministry for ratification before notification.

The total earnings of the EPFO during 2007-08 are close to Rs. 8,825 crore and liability Rs. 9,088 crore, leaving a deficit of approximately Rs. 264 crore that is expected to be fulfilled by Rs. 270 crore to be drawn from the Investment Fluctuation Account.

Representatives of the Centre of Indian Trade Unions, the Hind Mazdoor Sabha, the Bharatiya Mazdoor Sangh and the All India Trade Union Congress said the interest paid should be higher as banks were paying higher rate of interest.

CITU representative W.R. Varadarajan said the government should contribute to bridge the gap to give higher returns to the over four crore EPF subscribers.

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