EPFO board to meet today. PF interest rate, pension hike on agenda


The Employees’ Provident Fund Organisation’s (EPFO) top decision-making body is will meet on Saturday and is likely to discuss a number of key issues, reports have said. According to reports, the Central Board of Trustees (CBT) may take up topics like a rise in EPF or Provident (PF) interest rate, rise in minimum pension under Employees’ Pension Scheme or EPS and the expansion of EPFO’s investment basket to available investment options such as alternative investment funds (AIFs) and infrastructure investment trusts (InvITs).

Pension

The CBT will discuss the issue of raising the minimum pension for subscribers of the retirement fund during its meeting on Saturday. Reports said that CBT might raise the figure to 3,000 even as central trade unions have demanded a minimum raise of up to 6,000 from theexisting 1,000.

The Parliamentary Standing Committee on Labour recommended the minimum pension to be raised to 3,000 from 1,000 currently. The report by the committee, which is headed by Biju Janata Dal lawmaker Bhartruhari Mahtab, said that the pension last announced in 2014 is inadequate now.

“Even this meagre amount of 1,000 is reportedly not being given to many pensioners owing to various reasons and pension amounts as low as 460 are being disbursed. Therefore, demands and representations have been made for raising the monthly pension to a minimum of 3,000 or even a better amount ranging up to 9,000 per month,” the panel said.

Interest rate

The board may also discuss the interest rate for the ongoing financial year of 2021-2022.

Reports also said that the body will continue with the ongoing internet rate of 8.5 per cent on pension funds, recommended by the EPFO board on March 4 for FY21. The EPFO interest was lowered to a seven-year low of 8.5 per cent in FY20 from 8.65 per cent applied during the previous year.

Investment portfolio

The retirement fund body may also decide to expand its investment options to include available investment options such as private sector bonds, REITs, InvITs, units issued by Category I and Category II AIFs regulated by Sebi.

The EPFO can invest between 45 per cent to 50 per cent of its incremental funds in government securities, 35 per cent to 45 per cent in debt instruments, 5 per cent to 15 per cent in equities and to 5 per cent in short-term instruments and up to 5 per cent in asset-backed, trust-structured investments.

The changes in investment options were notified by the Union about ministry in April this year to include units issued by Category I and Category II AIFs regulated by the Securities and Exchange Board of India (Sebi).

The last meeting of the labour minister-headed body was last held in March this year.

The board is a statutory body constituted by the government under provisions of Section 5A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and has representatives of the government, workers and employers. Any decision taken by the body is biding on EPFO.



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Jitendra Kumar

Jitendra Kumar Born on October 10, 1990 an Indian author and activist from Hathras in Uttar Pradesh.