Wednesday, 16 February 2011

EPFO board sticks to 9.5% PF interest rate

NEW DELHI: Employee Provident Fund Organisation's Central Board of Trustees, the apex decision making body, on Tuesday stood its ground in the battle with finance ministry.

It backed an earlier decision to pay 9.5% interest to 4.7 crore EPFO subscribers and turned down the suggestion for a fresh look at the proposal for parking funds in the stock market.

The finance ministry had raised questions over EPFO's earlier recommendation to raise the payout from 8.5% to 9.5% and doubted how the provident fund body would find resources to the tune of Rs 1,700 crore to meet the additional burden. It had also said it was not possible to guarantee returns in case EPFO invested a part of the proceeds in the stock market.

The EPFO board had argued that it was not feasible to invest in the stock market unless the ministry was willing to guarantee a minimum return of 15% on investments. Labour secretary P C Chaturvedi cited the 2000-point dip in the Sensex in the last three months to justify the board's stand. Stock markets are considered too risky for PF members' money to be invested.

"They had sought some clarifications, which we've answered. We're confident that the approval will be given," Labor Minister Mallikarjun Kharge, who is the chairman of the board, said.

The board felt that the finance ministry should not have objected to the hike (9.5%) in the rate of interest, which was announced last year, since the government does not need to pay for meeting the commitment.

Earlier, EPFO had looked at its accounts since 1952-53, and concluded that the surplus Rs 1,731 crore could be distributed among members.

The finance secretary had objected to the calculation on surplus in the interest suspense account, arguing that the calculation is not valid till the surplus money has been credited to the 4.72 crore member accounts. Interest suspense account holds the money that has not been credited yet and on the basis of which the higher interest rate was declared.

Chaturvedi said there is no problem in the calculations, irrespective of the money is credited to member accounts.

Original Post: The Times of India

Related Posts
EPF Information through Internet and Mobile
There is a happy news for about 4.8 crore subscribers of Employees Provident Fund Organisation (EPFO) that you can access you Provident Fund (PF) transactions through your mobile by SMS alert or through internet. The Economic Times reported that the … Continue reading ?

Budget Expectation- Maximum limit of tax saving may be increased
All are looking eagerly for the forthcoming budget -2011 which would be presented in the Parliament at the end of February, 2011. There is an expectation for the hike of tax saving investment limit in the coming budget. The Telegraph … Continue reading ?

Employment News Job Highlights (29 January- 4 February 2011)
Following are the important job vacancy highlights in the Employment News 26th January, 2011 to 4th February, 2011. We publish this highlights for the knowledge of our readers and those who are looking for a job or wish to change … Continue reading ?

No comments :

Post a Comment