EPF rate to remain unchanged at 8.5%
Business Standard

The central board of trustees of Employee Provident Fund (EPF) today decided to retain the interest rate for employees' PF for the fiscal year 2007-08 at 8.5%.

After a three-hour meeting of the trustees, CITU general secretary Tapan Sen said the meeting decided to continue with 8.5% for 2007-08 ignoring the demands by trade unions to hike the interest rate to 9.5%.

EPF interest left unchanged for ’07-08
Financial Express

The interest rate for the Employee's Provident Fund (EPF) for 2007-08 will remain unchanged at 8.5%. The country's largest provident fund organisation, Employees Provident Fund Organisation (EPFO), on Thursday decided to keep the interest rate on the payouts unchanged from 2006-07.
A meeting of the central board of trustees (CBT), the policy making body of the EPFO, however, decided to remove the monopoly of the State Bank of India (SBI) to manage the fund to the tune of Rs 2,00,000 crore.

The rate is, however, more than the 8.25% recommended by the investment committee of the EPF. At the proposed rate the EPF would have a deficit of Rs 263.78 crore. The EPF rate is a sort of a floor rate for the bond market and also for small savings, as retail investors do a switch between parking their funds in the EPF and government securities based on the rates offered.

The meeting also took up the issue of investing 5% of the EPF money in the capital markets, but no decision was taken. The fund holds its investment to maturity in bonds issued by the Centre, state governments and other public sector entities only. By law, all private sector employees have to invest 12% of their monthly basic salary with the fund towards their provident fund and monthly pension, after retirement.

EPF board decides to continue with 8.5 per cent interest
Hindustan Times

The Central Board of Trustees of the Employees Provident Fund (EPF) Organisation on Thursday decided to continue with the 8.5 per cent rate of interest for the year 2007-08.
The decision, which would impact four crore subscribers, was taken at a meeting of the board, which is chaired by Union Minister for Labour and Employment, Oscar Fernandes.

A government release said in the evening that the board had considered the agenda for declaration of interest for the year 2007-08. “After considering the facts, the board noted that an interest rate of 8.5 per cent can be declared as a sustainable rate,” the release said.
It added: “some members reiterated their demand for declaration of a rate of 9.5 per cent. The board after considering all aspects decided to recommend to the government 8.5 per cent as rate of interest for 2007-08.”
The decision to retain 8.5 per cent interest will put a burden of Rs 450 crore on the EPF fund, but the deficit could be offset by a surplus of Rs 535 crore lying in the Interest Suspense Account.