EPFO reduces rate of interest on PF by 0.15%, shock to 60 million workers

by Jeremy Spirogis
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new Delhi. The Employees Provident Fund Organization (EPFO) has dealt a serious blow to the six crore shareholders. Union Labor Minister Santosh Gangwar stated that the Employees Provident Fund Organization will now pay 8.5 per cent curiosity on provident fund (PF) as an alternative of 8.65 per cent. The rates of interest have been lower by 0.15 per cent for the FY 2019-20. Earlier within the monetary yr 2012-13, the rate of interest on PF was 8.5 %.

Explain that because of the low returns on the Employees Provident Fund Organization (EPFO) funding, it was anticipated that the choice to scale back the rate of interest on provident fund (PF) deposits shall be taken within the assembly of Central Board of Trustees on 5 March. <! –

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                 In truth, the returns to EPFO ​​from long-term FDs, bonds and authorities securities have decreased by 50-80 foundation factors all year long.

Labor Minister Santosh Gangwar stated after the assembly that the EPFO ​​has determined to pay 8.5 % curiosity on provident fund deposits for 2019-20 within the CBT assembly held today. The Labor Minister stated that EPFO ​​would have a surplus of Rs 700 crore by paying 8.5 % curiosity on Employees Provident Fund deposits within the present monetary yr. A supply within the ministry stated that if the EPFO ​​had paid 8.55 per cent curiosity, it will have had a surplus of Rs 300 crore. The EPFO ​​would have misplaced out on paying extra curiosity.

The finance ministry was pressurizing the Ministry of Labor to make the rate of interest on EPF much like different small financial savings schemes run by the federal government, comparable to provident fund deposits (PPF) and post workplace financial savings schemes. For the rate of interest on EPF in a monetary yr, the Labor Ministry has to take the consent of the Finance Ministry. Since the Government of India is the guarantor, the Finance Ministry has to assessment the proposal of rate of interest on EPF to keep away from any legal responsibility in case of shortfall in EPFO ​​earnings.

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