EPFO board meet on Monday: Interest rate, higher pension top agenda

The meeting is also likely to focus on the steps to widen the social security organisation's coverage to embrace about 100 million workers and address the dip in its corpus

Wait of nearly 70 million EPFO subscribers to know about the return on their EPF savings for 2022-23 is likely to end after the retirement fund’s apex decision-making body, Central Board of Trustees (CBT), meets Monday in the national capital.

According to sources, the decision on interest rate for 2022-23 is likely to be taken in the two-day meeting of CBT.

As on March 31, 2022, the Employee Provident Fund Organisation (EPFO) had total investments of over Rs 11 trillion.

“Overall, EPFO investments have been doing well but it is unlikely that there will be a major increase in the return. It is expected to stay on the lines of the interest rate announced for last fiscal,” said an official familiar with the development.

Several union members, who are part of the CBT, say that the inflation has remained above the central bank’s tolerance band for the most part of the current fiscal.

“In a tightening policy environment, triggered by the US Fed, it is imperative that the interest rate is kept well above 8 per cent for subscribers to make some meaningful gains on their savings,” one of the members said.

In March 2022, the CBT had recommended a four-decade low interest rate of 8.1 per cent, leaving it with an estimated surplus of Rs 450 crore. And about two-thirds EPFO subscribers are yet to get the 8.1% interest credit for 2021-22.

CBT had last met on October 31 and decided to extend proportionate pensionary benefits for members who have been in the scheme for more than 34 years and extend the withdrawal benefits to members even with less than six months of service among other things.

A subsequent meeting scheduled for January could not take place due to administrative reasons.

Besides the interest rate, the issue of higher pension and the smooth implementation of the November 4 Supreme Court order along with the difficulties that pensioners are facing in accessing the pension portal are also likely to feature in the two-day meeting.

Government will be presenting an action taken report on the November 4 Supreme court judgement, listing out the steps it had taken since then. 

“All efforts will be made to draw the attention towards the non-accessibility of the pension portal and the ensuing confusion because of multiple and contradictory circulars issued by the social security organisation.

“We will also demand more transparency in the functioning of the organisation”, said Sukumar Damble, member, CBT.  

The meeting is also likely to focus on the steps to increase the social security organisation’s coverage to cover around 100 million workers and address the dip in its corpus, which could adversely affect the viability of the Employees Pension Scheme (EPS).

The audited annual accounts for FY21 show contributions to the scheme’s pension fund dropped 2.7 per cent to Rs 50,562 crore from Rs 51,953 crore in FY20.

Earlier, contributions had grown at a double-digit rate in the preceding four years, hitting a high of 16.4 per cent in FY18.

“One of the measures to address this shortfall is to increase the wage ceiling to Rs 21,000, so that more workers can come under the ambit. It has been under discussion for a long time and it is expected that the issue will come up again in the meeting on Monday,” said another person familiar with the development.