At the next meeting of the Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) scheduled later this month, increasing the minimum pension for the subscribers of the pension fund is the key agenda.
While the Central Trade Unions have demanded a hike of up to ₹6,000 from the current ₹1,000, the CBT may take it up to ₹3,000. The controversial issue of investing the EPFO money in private corporate bonds may also come up in the meeting. The CBT may also discuss the issue of the interest rate for the fund for 2021-22.
“We expect that the CBT may decide to increase it to ₹3,000,” a CBT member told BusinessLine. The Labour Standing Committee had recently recommended the Centre to increase the minimum pension to ₹3,000. However, a trade union representative said they do not expect much progress on this. “The Centre has been delaying the decision. The attitude of the Centre is against giving anything to pensioners and workers,” the TU leader said.
There are indications that the present interest rate of 8.5 per cent will continue for the money deposited in the EPF. “We were having an interest rate of 12 per cent earlier. We have been asking the Centre to restore it. But they brought it down to 8.5 per cent,” a Trade Union representative in CBT said.
A source in the Labour Ministry, however, said that there may not be any change in the current interest rate. The EPFO and the Finance Ministry have been urging the CBT to permit investment of money in the EPFO in various infrastructure bonds. At the moment, the money is invested in the exchange-traded funds (ETF) of the PSUs.
“The Centre was seeking permission to invest the money in private corporate bonds. It wants the CBT to look at the possibility of such investments on a case-to-case basis,” a member said. The CBT is likely to discuss the Centre’s request for removing the restriction on investing in private sector bonds. The agenda may also include permitting the Financial Investment Committee to invest in private bonds approved by the Finance Ministry. The meeting was scheduled to take place on November 16. But it has been postponed.
“The final agenda is not ready yet. We will hold a meeting in November itself,” a Labour Ministry official said. The last meeting of the CBT was held in Srinagar in March. The CBT recommended an 8.5 per cent annual rate of interest to be credited on EPF accumulations in members’ accounts for 2020-21. The Finance Ministry approved the proposal recently.