EPF payment at 8.5 per cent also an uphill task, say official / Dec 15, 2005 / NewInd Press
From Indiapensions
EPF payment at 8.5 per cent also an uphill task, say official
KOZHIKODE: The Employees Provident Fund Organisation (EPFO) will find it very difficult to pay the EPF even at the rate of 8.5 per cent, unless the government steps in to meet the deficit, said A D Nagpal, member of the Central Board of Trustees (CBT) of the EPFO.
Nagpal, also a national secretary of the Hind Mazdoor Sabha, was here on Wednesday on his way to Kochi to attend an all-India conference of his trade union.
"The EPFO will have to bear an additional burden of Rs 370 crore despite the cut in the interest rate from 9.5 per cent to 8.5. It would be very difficult for the organisation to pay even at the rate of 8.5 per cent, without government intervention," Nagpal told this website's newspaper.
He said all trade unions have agreed to exert pressure on the government to maintain the interest rate at 9.5 per cent. Accordingly, December 20 will be observed as an all-India protest day to mobilize support for the cause of employees.
While addressing the Indian Labour Conference in New Delhi, on December 8, the Prime Minister did not give us any assurance on maintaining the rate at 9.5 per cent as everybody expected. Hence, all trade unions decided to chart out a course of protest, he said.
"The government has wrongly linked the issue to the policies of the market economy. There is no rationale behind drawing a parallel between the bank rate and EPF rate."
On the investment pattern of the fund, he said the CBT will sit again for deciding on that. "In fact, that issue too was on the agenda of the last meeting. But the discussion on the EPF rate consumed the entire session."
Asked about his opinion on the investment options, he said, "security of the investment should be the prime concern. We cannot take employees' money into the volatile share market. The Seafarers Pension Fund had lost 25 per cent of the total capital in 1999-2000 after its exposure to the equity market".
"In 2001, the then government had asked the EPFO to expose 10 per cent of the fund to the equity market. But we did not go for that option considering the risk factor," said Nagpal, a CBT member since 1997.
