As the new fiscal year is set to begin, the central board of trustees, or CBT, of the Employees’ Provident Fund Organisation, or EPFO, is reportedly scheduled to meet to discuss a key issue. The members of the CBT, according to a report, will meet in the first week of March to finalise the rates of interest on provident fund deposits for 2021-22.
EPFO Meeting — What’s Likely to be Discussed?
The key members will meet at Guwahati next month, a report by the Economic Times suggested. In the preceding year of 2020-21, the top retirement body had maintained the interest rate of 8.5 per cent that was given out to EPFO members in the previous year.
On Wednesday, the Finance Investment and Audit Committee of the EPFO will sit on a meeting on Wednesday, February 9, the report suggested. The officials of this committee will discuss the earnings of EPFO till date during the meeting. They are likely to then recommend an interest rate to the CBT based on their deliberations.
According to sources aware of the matter, quoted by the Economic Times, the recommendations by the audit committee may be given a day before the CBT meeting or on the day itself.
During the last meeting of the central board of trustees, four sub-committees were created. Two of these sub-committees are headed by minister of state for labour Rameswar Teli, while labour secretary Sunil Barthwal is in charge of the other two.
These four sub-committees are also expected to put forth their recommendations on key issues pertaining to the EPFO during the upcoming meeting of the CBT next month. They may also seek an extension depending on the situation, as the third wave of the Covid-19 pandemic has disrupted work and meeting schedules, the report suggested.
Decision on AIF Investment
During its Wednesday meet, the finance investment and audit committee is also expected to have discussions on the Centre’s proposal to invest up to 5 per cent of the EPFO’s incremental income in alternate investment funds (AIF). The proposal also included investing in infrastructure investment trusts.
“At the last meeting itself, we had sought more clarity on the return as well as risk associated with investment in AIFs. The upcoming meeting will further deliberate on the proposal,” an anonymous member of the audit committee told the Economic Times.
The CBT, had in its last meeting in November, decided to empower the Finance Investment and Audit Committee (FIAC) to decide upon the investment options, on case-to-case basis, for investment in all such asset classes which are included in the Pattern of Investment as notified by the Centre.
Last year, the government had allowed up to 5 per cent investment in asset-backed, trust-structured and miscellaneous investments including AIFs. This made sure that the EPFO could maximise its returns by investing in a wider investment area.
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