The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) will be holding a meeting on March 27 and March 28 to discuss the higher salary linked-pension, annual financial estimates and financial year 2023 interest rates.
The decisions at the 23rd meeting of CBT chaired by Union labour and employment minister Bhupender Yadav would affect close to six crore active EPFO subscribers.
Interest rate
The EPF interest rate for this financial year is expected to be at approximately 8 per cent. In March 2022 the CBT had recommended 8.1 per cent for the last fiscal which was later refined by the finance minister in June of that year. This meant that the EPFO was at a Rs 450 crore surplus. This could indicate that the rates would be around the same range.
Higher pension
The CBT in their meeting are expected to have a detailed discussion on the higher pension option after a Supreme court order. According to a report by the Indian Express, the option of opting for a higher pension linked salaries till May 3, was a resolution for increasing the number of pensioners and bridging the gap between net present value (NPV) of contribution and benefits.
Ceiling wage
According to a report by Business Standard it is expected that the ceiling wage would be increased to Rs 21,000 from its earlier Rs 15,000. The last revision was in 2014 when the ceiling was raised from Rs 6,000 a month to Rs 15,000 for companies with over 20 employees.
Minimum pension
It is also expected that the minimum pension would be increased to Rs 3,000 a month from the earlier Rs 1,000, reported Zee News. This would support the recommendations made by the parliamentary standing committee of labour. Trade unions are demanding an increase to Rs 6,000 a month.
Tweaks to benefits
The CBT will also be discussing steps to bolster EPFO's coverage for workers, extend pension schemes to over 35 years of service and withdrawal benefits for those who have contributed for less than six months.
Investment
There will also be discussion on allowing increased investment of incremental deposits in equity instruments regardless of age or risk profile of members. This would impact organisations as close to 45-50 per cent invest in government securities, 35-45 per cent in debt, 5-15 per cent in short-term debt and 5 per cent in asset-backed or other instruments.
