The EPFO Finance wing’s recommendation of 8.25% was placed for consideration at a meeting of the Finance and Investment Committee of the EPF’s Central Board of Trustees held in early March. At the meeting, which was attended by senior Labour Ministry officials, the Central PF Commissioner and five employee and employer representatives from the EPF, it was decided to place the 8.25% recommendation for the consideration of the full Board though the Committee is expected to give the Board a clear recommendation.

Though employer representatives agreed with the recommended rate and Ministry officials also said that the “estimates presented by EPFO are practical and are based on facts” so the committee should give a “definite recommendation to the Board”, the two employee representatives, Bharatiya Mazdoor Sangh’s (BMS) A Venkatram and W R Varadarajan of the Centre of Indian Trade Unions (CITU), disagreed. Finally, the committee decided to consult the Board for a “wider view of the issues involved”.

Meanwhile, the Committee is expected to meet tomorrow to take forward a recent decision to appoint multiple fund managers for investing the EPF monies rather than rely on its banker and sole investment manager currently, the SBI. While an in-principle decision has been made, the Committee is expected to consider the criteria that could be laid down for selecting fund managers.

With the EPF rate for 2006-07 still in a limbo, Committee members have also asked the government to revert to the original practice of declaring the EPF rate at the beginning of the year as prescribed under the EPF Act, 1952. An estimated 20 lakh EPF subscribers close their accounts every year on account of resignation or retirement — failure to declare the interest rate means that exiting members get no interest at all for the year. The EPF rate declaration has been hijacked by politicians in the last five years, prior to which was a simple accounting decision.