EPFO retains 8.5% interest rate on PF deposits
What's the story
The Employees' Provident Fund Organisation will maintain the interest rates on provident fund deposits at 8.5% for the financial year 2020-21, the same as the previous fiscal. The decision was taken at a meeting of the Central Board of Trustees (CBT), the main decision-making body of EPFO, held in Srinagar, Jammu and Kashmir, on Thursday. The meeting was chaired by Labor Minister Santosh Gangwar.
Details
EPFO retained 8.5% interest rate keeping returns in consideration
At the meeting, discussions were held on the investment portfolio of the retirement fund body, a member of the CBT told The Indian Express. The member said the Board made the recommendation for retaining an 8.5% interest rate keeping the returns in consideration. Earlier, there was speculation that the EPFO may lower the interest rate due to frequent withdrawals and lesser contributions by members.
Context
EPFO had disbursed Rs. 14,310 crore till December 31
Amid the coronavirus pandemic, the EPFO saw increased withdrawals and lower contributions. It settled 56.79 lakh non-refundable advance claims and disbursed Rs. 14,310 crore till December 31, 2020. Recently, it was reported that EPFO subscribers may face curbs on withdrawals. The body has proposed to allow subscribers to withdraw benefits from pension schemes only after two continuous years of exit from employment.
Previous years
Interest rate was lowered to 8.5% last year
Last year, in March, the EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5% for 2019-20 from 8.65% in 2018-19. Before last year, the interest rate was lowest in 2012-13 fiscal, when it was 8.5%. For 2016-17, the retirement fund body had provided an 8.65% interest rate to its subscribers, and an 8.55% interest rate in 2017-18.