Labour Minister Santosh Gangwar has said that there is no disagreement with the finance ministry on providing 8.55 per cent rate of interest for 2017-18 to over fifty million subscribers of retirement fund body EPFO.
The Employees’ Provident Fund Organisation’s apex decision making body Central Board Trustees (CBT) had decided to provide 8.55 per cent rate of interest on EFF for last fiscal on February 21, 2018 and sent the proposal to the finance ministry for its concurrence.
“It is not that they have rejected our proposal (of 8.55 per cent rate of interest on EPF deposits for 2017-18). They can give suggestion on our proposal, ” Gangwar said.
“The proposed rate of interest will be ratified by May or June as per convention. There is no disagreement on the proposed interest rate. Had there been any disagreement, we would have got their view by now,” he added.
The minister was responding to the speculations that the finance ministry may not approve the 8.55 per cent interest rate on EFF for 2017-18 which is even lower than the 8.65 provided for 2016-17.
After providing 8.55 per cent interest for 2017-18, the EPFO would have a surplus of Rs 5.86 billion. The 8.55 per cent rate of interest would be lowest rate in last five year for subscribers.
They got 8.8 per cent in 2015-16 and 8.75 per cent each in 2013-14 and 2014-15. In 2012-13, the EPFO had provided 8.5 per cent rate of interest on EPF.
On enhancing minimum monthly pension under the Employees’ Pension Scheme 1995 run by the EPFO, Gangwar said: “There is no such proposal from the Labour Ministry. Government then (in 2014-15) paid around Rs 8 billion for minimum monthly pension of Rs 1,000 under the scheme.”
Central Trade Unions have been pressing for Rs 3,000 minimum monthly pension and have also demanded its indexing, linking it with inflation.
On enhancing investments in the exchange traded funds (ETFs), from 15 per cent to 25 per cent of investible deposits, the minister said that the finance ministry notified investment pattern provides for investment of 5 to 15 per cent in equity or equity linked schemes by private provident funds.
The EPFO had started investing in August 2015. In 2015-16 it invested 5 per cent of its investible deposits which was subsequently increased to 10 per cent 2016-17 and 15 per cent in 2017-18.