No pension funds for stocks, says EPF board
New Delhi, January 27
While rejecting the Finance Ministry’s proposal, the CBT at its 178th meeting held here, reiterated its proposal to permit the investment by EPFO in National Savings Certificate and Post Office Termed Deposit Receipt and permitted TDRs with private sector banks subject to a limit of 5 per cent of the deposit base.
In today’s meeting, there was a strong opposition from the Left-affiliated unions on the Finance Ministry’s revised investment guidelines as they feared that crash in stock market would ruin the hard-earned money of the EPF subscribers.
The meeting, chaired by Labour and Employment Minister Oscar Fernandes, also failed to clinch the contentious issue of interest rate for 2006-07 for its four crore subscribers.
Although the issue of the rate of interest for EPF subscribers for 2006-07 was on top of the agenda, the meeting deferred it and the next meeting is likely to be held in the last week of February or in early March.
Mr Fernandes, who is the ex-officio chairperson of the CBT, told newspersons that further consultations would be held with the CBT members on this issue.
While discussing on the revised investment guidelines, the meeting, attended by the representatives of employees, employers and state governments and the Labour and Employment Secretary Sudha Pillai, spurned the Finance Ministry’s proposal for investing a part of the fund in the stock market.
Mr D.L. Sachdeva, Secretary of CPI-affiliated union AITUC, said the trade unions have demanded a meeting with Prime Minister Manmohan Singh on the issue of interest rate.
Mr Sachdeva said the deadlock persisted as the EPFO kept harping on its stand that it was cash-starved while the employees’ representatives strongly felt that there was enough money.
At the present rate of 8.5 per cent, EPFO will have a Rs 450 crore deficit and a reduction by half a per cent will leave it with a marginal surplus of Rs 10.25 crore.
At the last meeting of the CBT, trade union leaders, including those of Congress-affiliated INTUC, wanted the Labour Minister to see if the government could raise interest rates on special deposit schemes from the current 8 per cent or give some kind of financial support to the Board to raise the EPF interest rates.