|
The government has decided to give the interest rate @ 9.5% on the deposits of the Employees Provident Fund subscribers for 2002-03, 2003-04 and 2004-05. The notification to this effect will be issued by the Labour Ministry. The increase in the rate of interest for the current financial year would be brought up before the Central Board of Trustees, EPFO. The measure will benefit over four crore EPF subscribers working in more than 3.70 lakh establishments.
The Central Board of Trustees, CBT, had in August recommended an interim rate of interest of 8.5% on their deposits for the current financial year to be reviewed at the year end when the actual earnings on the EPF investments would be known. The interest income at that time was projected at Rs. 5919.42 crore and the interest payment liability at Rs 6125.87 crore at 8.5% rate of interest entailing a deficit of Rs. 206 crores. This liability would increase to Rs.6846.57 crore at 9.5% rate of interest raising the deficit to Rs.927.15 crores.
The Central Board of Trustees had earlier in April 2002 recommended an interest rate of 9.5% for 2002-03. The interest income during that year has been Rs 5835.61 crore leaving a surplus of Rs. 204.92 crore after meeting the interest payment liability @ 9.5%.
Similarly for 2003-04, the CBT recommended a composite interest rate of 9.5% (rate of interest @ 9% and one-time golden jubilee bonus interest of 0.5%), meeting which would result in shortage of Rs.271crore. The EPFO at that time said that the shortfall could be met from the surplus income of previous years ( Rs. 504 Crore from 2001-02 and Rs. 204 crore from 2002-2003). The CBT requested the Finance Ministry to ratify its decision to pay EPF subscribers interest at the rate of 9.5% for 2002-03 and 2003-04 pending which it decided to settle the claims of outgoing members at 9.5% interest rate.
The EPFO is already engaged with efforts to increase yield on investment. The Central Board of Trustees during its last meeting in December 2004 recommended to amend the investment pattern and to allow EPFO to invest in Post Office Term Deposits and National Savings Certificates. Further, the CBT also recommended to enhance rate of interest on Special Deposit Scheme (SDS) in which Rs. 53,434.10 crores of EPF deposits are invested as on 31/10/2004 and to allow reinvestment of interest on SDS in SDS itself.
At present, the total corpus of the EP Fund is Rs. 1.28 lakh crore which includes Rs.71,000 crore of the Employees Provident Fund, Rs. 52,000 crore of the Employees Pension Fund and Rs. 4,000 crore of the Employees Deposite Linked Insurance Scheme.
MLD …L-132(EPF interest rate)Feb-3
|
