EPFO lowers interest rate to 8.55 percent; know more
In a major decision, the retirement fund body EPFO lowered the rate of interest on employees provident fund to 8.55 per cent for its over 6-crore subscribers for 2017-18, from 8.65 per cent in the previous fiscal.
The reason cited for this decision was the economic scenario.
Labour Minister Santosh Gangwar said that while a 8.65 per cent was paid last fiscal, which left a surplus of Rs 695 crore, this year the decision has been to recommend 8.55 per cent for 2017-18 to leave behind a surplus of Rs 586 crore.
The decision came about after the Employees’ Provident Fund Organisation’s (EPFO) trustees meet.
Gangwar, who also heads EPFO’s apex decision making body Central Board of Trustees (CBT), said he expects the finance ministry to give approval to the 8.55 per cent rate of interest.
After the CBT’s decision on interest rate, the proposal is vetted by the finance ministry.
He said the EPFO received 8 per cent returns on its bond investments but it is able to pay 8.55 per cent rate because it has sold some of its investments in ETFs.
At present, all those units employing 20 or more employees are mandatorily covered under the social security schemes run by the EPFO.
He expressed hopes that reduction in employees threshold could help increase the EPFO subscribers’ base from existing 6 crore to even 9 crore.
On this occasion, the minister also launched the EPFO’s UAN-AADHAAR linking facility for the convenience of the members using EPFO link in UMANG mobile application.