The over six crore subscribers of the Employees’ Provident Fund Organisation (EPFO) will soon have cause for cheer. Labour Minister Santosh Gangwar said on Tuesday that the already approved 8.65 per cent interest rate for FY19 will get credited into members’ accounts “ahead of the festival season”.
In February, the Central Board of Trustees, EPFO’s apex decision-making body, had approved a 10 basis point rate hike for the last fiscal – the first hike in three years, albeit much lower than the 8.8 per cent rate for FY16. At present, the body is settling PF withdrawal claims at a five-year low rate of 8.55 per cent, which was approved for 2017-18.
Although the Department of Financial Services (DFS) gave its concurrence to the proposal in April, a notification by the labour ministry is required for crediting the interest amount. “I believe that it will soon be notified,” Gangwar had said on the sidelines of a FICCI conference late last month.
Post this step, the EPFO will give directions to its over 136 field offices to credit the rate of interest into subscribers’ account and settle their claims accordingly.
According to the retirement fund body’s estimates, there would be a surplus of Rs 151.67 crore after doling out the higher interest rate for 2018-19 on the EPF. But at 8.7 per cent interest on EPF, there would have been a deficit of Rs 158 crore, and hence the body decided on 8.65 per cent interest rate for FY19.