CBT to discuss EPFO rate hike today

NEW DELHI: The top policy making body of the employees provident fund organisation--the Central Board of Trustees--will take a call on crucial issues such as investing in capital markets without government guarantees, settling for a lower interest rate for subscribers in the current fiscal and tightening of the EPFO Act to check misuse by employers on Tuesday.

The employees provident fund organisation (EPFO) will place before the CBT the finance ministry’s letter questioning the CBT’s earlier decision to increase interest rate for subscribers to 9.5% from 8.5% based on the surplus discovered in its accounts, as per the meeting agenda. It will also seek approval on its reply to CAG audit which stated that the surplus was `` unverifiable’’ . The EPFO argued that its calculation could not be questioned just because individual accounts of holders had not been credited with the surplus amount as the corpus anyway would be the same.

The EPFO will also seek approval to its reply to the finance ministry’s refusal to guarantee capital market returns despite its insistence that the fund should invest 15% of its corpus in the market. “Insisting on fiduciary responsibility and due diligence of trustees on one hand, and giving directions to invest in risky ventures without any guarantee on the other are contradictory and unacceptable,” the EPFO has said.