By TIOL News Service

NEW DELHI, AUG 27, 2014: THE Union Minister for Labour and Employment, Steel and Mines, Mr Narendra Singh Tomar, who chaired the CBT meeting yesterday, has decided to recommend 8.75% interest rate on EPF deposits for the year 2014-15.

The service charges levied by the SBI on collection amount of EPF (remittances made by establishments as EPF contribution) have been reduced from the existing uniform rate of Rs 3 per Rs 1000. The charges have been reduced to Rs 1.80 per Rs 1000 for net based transaction and Rs. 2.40 per Rs. 1000 for physical transaction. It is expected that this reduction in rates shall result in substantial savings to the tune of around Rs 100 crores per annum for the Organisation.

The proposed pattern of investment by Ministry of Finance was discussed and deliberated by the Board and the Board was not in favour of investing in equities and Exchange Traded Funds (ETFs). It was decided to make the pattern more flexible to further increase the percentage of investment in government securities. Further, it was decided to appoint CRISIL as consultant for the selection of fund managers of EPFO.

The Board also discussed the feasibility of deployment of EPF funds in AAA rated CPSUs (Central Public Sector Undertaking) and SPSUs (State Public Sector Undertaking) through mutual agreement.

It was also decided to go in for short term (not exceeding 15 days) borrowing of funds for participation in primary auction of securities. This move is expected to result in EPFO getting to invest in securities at more profitable rates. The funds would be borrowed by means of CBLO, Corporate Term Repo and other such instruments for participation in primary auction of government securities and corporate bonds.

It was decided that the report of the actuary on the evaluation of the EPF shall be examined by the Finance, Investment and Audit Committee of the CBT. The Committee shall examine the fluctuations in deficit/surplus in the pension fund for taking further corrective action.

It was decided to constitute a Sub Committee for construction and contract workers. The Committee shall examine the various issues regarding the coverage of employees engaged in this sector and shall recommend strategies to widen the coverage and enrollment in this area.

The Board also took stock of the various new developments and initiatives taken by EPFO like provision of Universal Account Number (UAN) which shall greatly contribute to improvement in service delivery and the New Inspection Scheme which gives primacy to transparence and accountability in conducting inspections and which also includes the formation of a Central Intelligence and Analysis Unit (CAIU) for effective monitoring of compliance functions.