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EPFO defers decision on PF interest rate

EPFO had offered 12 percent as a rate of return between 1989 and 2000.

New Delhi, April 9 (IANS) The Board of Trustees of the Employees Provident Fund Organisation (EPFO) Friday deferred a decision on paying a higher interest rate on provident fund deposits for the 2010-11 fiscal, but decided to invest in joint venture companies in which the government holds at least 26 percent stake, an official said.

The EPFO's apex decision-making body which met here could not agree on a higher interest rate for PF deposits for 2010-11.

 

Trade union representatives have been demanding that the rate be raised to 10.5 percent from 8.5 percent, which has been in force for the past five years.

 

The EPFO had offered 12 percent as a rate of return between 1989 and 2000.

 

A decision on the interest rate has implications for 4.7 crore subscribers. The EPFO currently has a corpus of about Rs.2.5 trillion.

 

The EPFO expects to add Rs.15,036 crore in 2010-11 while maintaining the interest rate.

 

The EPFO was, however, allowed to invest funds in joint venture companies in which the government has at least 26 percent stake, the official said.

 

The meeting, attended by Labour and Employment Minister Mallikarjun Kharge, decided to raise insurance benefit under the Employees Deposit Linked Insurance scheme from Rs.60,000 to Rs.100,000.

Employees Provident Fund Organisation,

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