The Employees’ Provident Fund Organisation (EPFO) will quickly begin crediting 8.1% charge of curiosity for 2021-22 to its members because the finance ministry has ratified the speed proposed by the retirement fund physique in March.
In March, the Central Board of Trustees (CBT), the best decision-making physique of the EPFO, determined to decrease the curiosity on provident fund deposits for 2021-22 to an over-four-decade low of 8.1% for its almost 65 million subscribers. This was the bottom EPF curiosity state since 1977-78, when it stood at 8%, however nonetheless increased than the returns small savers might get beneath another fixed-income schemes.
For 2020-21, the rate of interest for EPF was set at 8.5%, the identical as within the earlier fiscal.
“The ministry of labour and employment, government of India, has conveyed the approval of the central government to credit interest @8.1% for the year 2021-22 to the account of each member of the EPF scheme. You are, accordingly, requested to issue necessary instructions to all the concerned for crediting the said interest rate to the member accounts,” further central PF commissioner (funding) Abhay Ranjan mentioned in a observe to heads of EPFO’s zonal and regional places of work.
As per the observe, the speed proposed by the CBT must be ratified by the finance ministry earlier than the identical is credited to particular person workers’ provident fund (EPF) accounts, even because the EPFO pays the curiosity from its personal earnings with out relying upon the exchequer.
The ratification got here fairly little early for 2021-22. For 2020-21, it got here across the finish of October 2021.
KE Raghunathan, a CBT member representing employers within the tripartite physique, lauded the velocity at which the rate of interest for 2021-22 has been authorised by the federal government.
“It is really appreciable considering the dire needs of funds in the hands of employees and further it will certainly help them meet expenses such as educational needs of their children,” he mentioned.
At 8.1%, EPFO must fork out round Rs 76,000 crore as curiosity to its subscribers for 2021-22, which is able to allow it to have a marginal surplus of Rs 450 crore. EPFO now receives over Rs 2.1 trilion as subscription yearly and invests its amassed corpus – round Rs 18 trillion now – in debt and fairness devices within the 85:15 ratio.
Source: www.financialexpress.com”