The Central Board of Trustees of the EPFO will meet on Thursday to consider the return for the current year besides an increase in the minimum pension for subscribers.
The government is likely to retain the provident fund interest rate at 8.55% despite the decline in interest rates, benefitting over 60 million subscribers of the Employees’ Provident Fund Organisation (EPFO). The Central Board of Trustees (CBT) of the EPFO will meet on Thursday to consider the return for the current year besides an increase in the minimum pension for subscribers. The doubling of the minimum pension under the Employee Pension Scheme (EPS) of the EPFO will benefit nearly 5 million subscribers.
“There is a FIAC (finance, investment and audit committee) meet just before the CBT meet on Thursday in which we will get a clear picture on the accounts of EPFO and the rate of interest that can be offered. But we hope it will be retained at the existing level,” said Prabhakar Banasure, a CBT member. The CBT is a tripartite body with representatives from the government, employers and trade unions headed by the labor minister. It is the apex decision-making body of the EPFO. The 8.55% rate is higher than that available on government small savings schemes, the return on which is benchmarked to market rates. The RBI cut key interest rates by a quarter point on February 7, citing the easing of inflationary pressures and the need to lower the cost of funds to support economic activity amid a worsening global growth outlook in the past few months. “The sub-committee on pension has reviewed the proposals of a high-empowered committee to double the minimum pension to Rs 2,000 from Rs 1,000 now, restrict its withdrawal before retirement and introduce some amount of contribution from the beneficiaries during their work life,” said another official, adding these could be laid before the CBT.