Thursday, November 28, 2013

EPFO to pay at least 8.5% interest on PF deposits year 2013 - 2014

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Retirement fund body EPFO will pay at least 8.5 per cent rate of return on PF deposits for 2013-14 to its over 5 crore subscribers as provided in the previous fiscal and the decision in this regard could be taken as early as next month.

"The Employees' Provident Fund Organisation (EPFO) will not pay less than 8.5 per cent interest rate on PF deposits for the current fiscal," an EPFO official said.

"The decision in this regard could be taken in December as the body is planning to schedule a meeting of its apex decision making body Central Board of Trustees (CBT) next month," he added.

EPFO had provided 8.5 per cent interest rate for 2012-13, up from 8.25 per cent in 2011-12.

Trade unions have written to the Labour Ministry to urgently convene the meeting of EPFO's apex decision making body CBT to decide on the interest rate.

Ever since the CBT was reconstituted in May, no meeting has been held so far. Since the new CBT has not met after its reconstitution in May, no sub-committees could be reconstituted. The term of the sub-committees is co-terminus with the CBT.

The EPFO official said that CBT would have to meet at least twice before deciding interest rate on PF deposits for the current fiscal.

In the first meeting, the trustee would constitute FIC and in the second meeting they would decide on interest rate based on the recommendations of the committee looking at the proposal.

The proposal for the interest rate is prepared by the EPFO which is vetted by the FIC and goes to CBT for final consideration. Once approved by the CBT, the decision on interest rate requires concurrence of Finance Ministry which has to notify it.

Only after notification, the interest is credited into the accounts of subscribers.

As per the norms, EPFO is expected to announce rate of interest on PF deposits before the beginning of a financial year. However, for the past few years, there has been delay in announcement of the rates.

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