EPF interest rate to remain at 8.5%

The Central Board of Trustees (CBT) of the Employees Provident Fund (EPF) has recommended a rate of interest of 8.5 per cent for 2008-09.
The decision was taken at the 186th meeting of the CBT on Sunday, which was the fourth regular meeting of the newly constituted board.
It was convened here under the chairmanship of Mr Oscar Fernandes, Minister of State for Labour and Employment.
“The board considered the statutory item to recommend rate of interest for the year 2008-2009 for crediting to the subscribers account as 8.5 per cent. However, the employees’ representatives were in favour of higher rate of interest and during the deliberations, they recorded their dissent,” an official release issued here after the CBT meeting said.
The board also considered the coverage of contract employees under the EPF Act and better extension of social security cover to existing employees. The matter will be further taken up in a subsequent meeting after obtaining the views of various members, the release added.
During the previous year as well, the subscribers of the EPF had got an interest rate of 8.5 per cent. According to the Labour Ministry, the EPF had a membership of 449.19 lakh as on March 31, 2008, covering 532,702 establishments and with an invested corpus of about Rs 2,00,000 crore.
Till 1975, EPF funds were invested only in Central Government bonds. The Special Deposit Scheme (SDS), managed by scheduled banks, was launched in 1975 to achieve better returns.
Nearly Rs 53,000 crore, or around 44 per cent of the total EPF corpus, was invested in the SDS, according to latest Ministry data. Investments in the SDS, which used to earn an interest rate of 12 per cent earlier, now fetch only 8 per cent.