- Employees' Provident Fund deposit to earn lower interest this fiscal year
- Interest rate revised to level last seen in financial year 2012-13
- Revision likely to impact around six crore EPF subscribers
Here are 10 things to know about the EPF:
The decision was taken at a meeting of the Central Board of Trustee (CBT), which is the top decision-making body of the EPFO. “The Central Board of Trustees (CBT) has decided to decrease the rate of Employees' Provident Fund (EPF),” Mr Gangwar said after the meeting.
With the proposed revision, the EPF interest rate stands reduced to a level last seen in financial year 2012-13. (Also Read: How To Apply For A PF Withdrawal Online)
Mr Gangwar also said that the EPFO will have a surplus of over Rs 700 crore after providing the new interest rate for the current financial year.
The interest rate was decided after a careful evaluation of the prevailing market situation, and any rate above 8.5 per cent could have had an impact on the stability of the EPF corpus, sources in the Labour Ministry said.
“The decision has been taken after balancing the interest of workers and the EPF corpus… It is the best rate possible under the existing market reality,” they added.
Bharatiya Janata Party(BJP)-affiliated trade union Bharatiya Mazdoor Sangh (BMS) said its representatives along with members of the CBT protested against the decision, and demanded to maintain the existing rate of 8.65 per cent, “but due to non-availability of extra income generation, the Finance Investment & Audit Committee (FIAC) recommended the rate of 8.5 per cent”.
After clearance by the Central Board of Trustees, the proposal is sent to the Finance Ministry. The interest amount is credited to the accounts of the subscribers after the Finance Ministry gives nod to the proposed rate.
For financial year 2017-18, the retirement fund body had kept the interest rate steady at 8.55 per cent, after revising it to a four-year low the previous year.
Currently, the government reviews the interest rate applicable to the provident fund (PF) scheme for salaried individuals on a yearly basis.
The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with small saving schemes.
EPF Interest Rate
|Year||EPF Interest Rate|