Retirement fund body EPFO is likely to announce rate of interest on PF deposits for the current fiscal for 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 has been rescheduled for August 26. Earlier it was to be held on August 21.
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 a senior official, the computation of the interest rate for the current fiscal would be a vexed issue this time as the new government has announced raising of wage ceiling from Rs 6,500 per month to Rs 15,000 per month.
However, the new wage ceiling has not been implemented so far as government is yet to issue a notification on this.
At present, all those workers in organised sector who have their basic wages up to the prescribed wage ceiling are covered under the social security schemes run by the EPFO.
The official said that with the increase in wage ceiling, the EPFO coverage and deposits would increase. Thus the EPFO would have prepare an income projection for the current fiscal on the basis of enhanced coverage and deposits.
It is estimated that the around 50 lakh more workers would under the EPFO coverage once the new monthly wage ceiling of Rs 15,000 is implemented.
As per practice, the CBT decides rate of interest based on the income estimates for a financial year by the EPFO, which later requires concurrence by 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 and performance evaluation of selected portfolio managers. The trustee would also constitute committee for the purpose.
The CBT will also deliberate on long term funding with public sector undertakings like power major NTPC. They will also take a decision regarding the extension of the tenure of their custodian Standard Chartered Bank till October 31.