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18 February 2019
 |
India
(The Total Investment & Insurance Solutions)
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 EPFOwill 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 an 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 labour 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 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.The Total Investment
& Insurance Solutions
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