New Delhi: The EPF board that governs the Rs90,400 crore pension fund delayed a decision on the interest that will be paid to its four crore subscribers for the current financial year.
Labour Minister Oscar Fernandes, who is the chairman of the EPF Board of Trustees, told the meeting that some more time was needed to fix the interest rate for the current fiscal.
“We’ve deferred the decision on the request of the labour minister,” W.R. Varada Rajan, member of the panel and secretary of the Centre of Indian Trade Unions, told reporters in New Delhi on 10 March 2007.
Sources said the trade unions participating in the meeting rejected a suggestion for 8% interest rate for 2006-07 and 8.25% for 2007-08.
The rate of interest for 2005-06 was 8.5%.
“We are going through certain deliberations and need time to complete them,” Fernandes told reporters, without elaborating. “We have therefore decided to postpone these decisions. We are trying our best to settle the issue very soon.”
The government can afford to pay an interest rate of no more than 8% on the pension fund, based on its current interest income, Fernandes said. The fund will face a deficit of Rs450 crore in the current financial year if the rate is sustained at 8.5%, he said.