Government okays salary cap hike for EPF; threshold for savings raised from Rs 6,500 a month to Rs 15,000

Government okays salary cap hike for EPF; threshold for savings raised from Rs 6,500 a month to Rs 15,000

NEW DELHI: Employees earning upto Rs 15,000 a month will soon come under the Employees’ Provident Fund (EPF) net, with the Narendra Modi government approving a hike in the threshold for mandatory PF savings from Rs 6,500 a month to Rs 15,000.

Though the Manmohan Singh government had approved the hike in the EPF threshold this February after years of deliberations, the change couldn’t be notified before the election code of conduct kicked in.
Another UPA decision to assure a minimum monthly pension of Rs 1,000 for members of the employees’ pension scheme run by EPFO, in its final weeks in office, was also not notified before the polls.
Ministry officials had sought a fresh approval on the salary ceiling hike from the new minister for labour and employment Narendra Singh Tomar.

“The minister has approved the higher salary ceiling for mandatory EPF savings, and we will issue a notification soon for it to become effective,” said a senior government official aware of the development.

The ministry is also learnt to be examining if the minimum Rs 1,000 pension promise is sustainable.

The finance ministry, which had approved the pension promise with great reluctance and several conditionalities, had only provided funds to finance the bonanza for 2014-15.

At a board meeting in February, officials had warned that the pension assurance may have to be rolled back next year as there was no funding support beyond the first year. But their concerns were over-ruled by the previous labour minister Oscar Fernandes, who was the board’s chairman.

The Employees’ Provident Fund Organisation or EPFO oversees the retirement savings of over 8 crore members at present and the number could go up sharply as those earning between Rs 6,500 and Rs 15,000 will come under its fold once the new rules are notified and implemented.

The EPFO’s present ceiling for statutory contributions is a mere Rs 6,500 per month – lower than the minimum wage prescribed across the country.

Twenty-four percent of an employee’s salary (up to the ceiling) is mandatorily deducted and parked with the PF office.

Read more at: http://economictimes.indiatimes.com

EPFO likely to provide 9% interest for 2014-15

EPFO likely to provide 9% interest for 2014-15 - Economic Times
By PTI | 7 Jun, 2014

NEW DELHI: Retirement fund body EPFO is likely to provide nine per cent rate of interest on PF deposits for the current fiscal to its over five crore subscribers, slightly higher than 8.75 per cent paid in 2013-14.

"The initial estimates indicate that the Employees' Provident Fund Organisation (EPFO) can easily provide nine per cent rate of interest on PF deposits for 2014-15," a source said.

According to him, the improved market conditions, especially after the formation of a new government at Centre last month, have raised expectations of higher yields on various investments by the body.

EPFO manages a corpus of over Rs 5 lakh crore. It has received Rs 71,195 crore as incremental deposits from its subscribers under social security schemes run by it during 2013-14, which is 16 per cent higher than Rs 61,143 crore collected by it in 2012-13.

The source said EPFO also plans to unlock its investment of around Rs 55,000 crore in Special Deposit Scheme (SDS). The government pays a fixed rate of eight per cent on SDS to EPFO which is lower than other investment options available in the present legal frame work.



EPFO is also expected to improve yields or returns on its investment under the new norms prescribed under an investment pattern notified by the Labour Ministry last year.

According to the new pattern, EPFO can invest up to 55 per cent of its funds in debt securities issued by banks and financial institution and other body corporates.

The new investment pattern also allows EPFO to invest up to five per cent of its corpus into money market instruments, including units of mutual funds, equity linked schemes regulated by Securities and Exchange Board of India.

The new investment norms also provide for parking up to 55 per cent of the EPFO funds in a new category comprising government and state bonds.

Source: http://economictimes.indiatimes.com/

EPFO trustees may decide on 8.5% interest rate today i.e. 13th Jan, 2014

EPFO trustees may decide on 8.5% interest rate today i.e. 13th Jan, 2014

 The meeting is being held nearly a year after the last in February 2013.

“There are 38 items on the agenda, including approval of the annual report, as the meeting is taking place after so long,“ said a CBT member, adding that after the board’s reconstitution in May 2013, it was meeting only now.

The CBT is headed by the Labour Minister. However, this fiscal, the Labour Ministry has seen a change of three Ministers — from Mallikarjun Kharge to late Sis Ram Ola and Oscar Fernandes now, who has been given additional charge of Surface Transport.

Contributions

In 2012-13, the total contributions received by the Employees Provident Fund Organisation (EPFO) from its 8.87-crore subscribers stood at Rs 77,000 crore. The investment corpus, as of end March 2013, stood at Rs 6,32,159 crore.

With retail inflation hovering around 11 per cent, trade union representatives in the tripartite body said they would press for a higher interest rate this year.

Union demand

“We will demand 9.5 per cent for this fiscal,” D.L. Sachdeva, Secretary, All India Trade Union Congress and CBT member, told Business Line.

Once the trustees approve the interest rate, it has to be cleared by the Finance Ministry, which then notifies it, after which the interest is credited to the accounts of subscribers.


Source: Hindu BusinessLine
[http://www.thehindubusinessline.com/economy/epfo-may-keep-interest-rate-on-pf-deposits-at-85/article5569910.ece]

8.5% on PF deposits expected, EPFO board meeting likely on 4th October 2013

8.5% on PF deposits expected, EPFO board meeting likely on 4th October 2013: Financial Express

The reconstituted EPFO's Central Board of Trustees (CBT), which has to take a call on interest rate on PF deposits for the current fiscal, is likely to hold its first meeting on October 4. The meeting of the CBT headed by the Labour Minister is likely to be called on October 4 for reconstituting EPFO's sub-panels like its advisory body Finance and Investment Committee (FIC), an Employees' Provident Fund Organisation's (EPFO) official said.

As per the practice, FIC vets financial proposals of EPFO and puts those before the CBT for a final call. The committee is supposed to vet and put forward the proposal for providing a rate of interest on PF deposits every year.

EPFO could not announce the interest rate on PF deposits for the current fiscal as the FIC is yet to be constituted after the CBT was reconstituted in June.

The sub-panels like FIC were dissolved after CBT was formed again in June. Once FIC is reconstituted, the EPFO would provide official estimates to it for vetting and putting forward its view before CBT for taking final call.

According to sources, EPFO is likely to announce an interest rate of 8.5 per cent on PF deposits for 2013-14 to its over five crore subscribers, the same as provided for last fiscal.

The preliminary estimates indicate that the payment of 8.5 per cent rate of interest will leave no deficit for EPFO and could rather leave some surplus for the body.

EPFO paid 8.5 per cent interest rate to its subscribers in 2012-13, which was higher than 8.25 provided in the 2011-12 fiscal.

Source: http://www.financialexpress.com
[http://www.financialexpress.com/news/8.5-per-cent-on-pf-deposits-expected-epfo-board-meeting-likely-on-october-4/1169475]