Employee Provident Fund Rate Hiked in Big Step For Aam Aadmi
EPFO Board recommends interest rate of 8.65% for FY19
Retirement fund body EPFO or Employees' Provident Fund Organisation has increased the interest rate on employees' provident fund (EPF) to 8.65 per cent for the current financial year (2018-19), news agency Press Trust of India quoted Labour Minister Santosh Gangwar as saying in a report. The increase in EPF interest rate - from 8.55 per cent in financial year 2017-18 - is expected to benefit six crore subscribers of the provident fund scheme.
All members of the Central Board of Trustees (CBT) of the EPFO agreed to give a higher interest for subscribers for the current fiscal year, Mr Gangwar was quoted as saying by the agency. The proposal would go to the Ministry of Finance for approval, he said after meeting of Central Board of Trustees.
Headed by the labour minister, the Central Board of Trustees (CBT) is the apex decision-making body of the EPFO, which finalises the interest rate applicable to provident fund (PF) deposits.
Once the Central Board of Trustees approval is in place, the proposal is sent to the finance ministry. It is after the clearance of the Ministry of Finance that the interest as per the approved rate is credited into the subscribers' accounts.
For financial year 2017-18, the retirement fund body had kept the interest rate steady at 8.55 per cent - the lowest interest rate recorded in five years. It had provided interest at the rate of 8.8 per cent to the subscribers for financial year 2015-16.
The interest rate stood at 8.75 per cent for financial years 2013-14 and 2014-15, and 8.5 per cent for 2012-13.
The Board of retirement fund body Employees’ Provident Fund Organisation (EPFO) has recommended an interest rate of 8.65 percent for FY19, 10 basis points higher than FY18, to its six crore subscribers.
This is the first time since FY16 that the interest rate has been raised.
The EPFO Board also discussed the issue of raising the minimum pension under the employee pension scheme (EPS). However, a decision on the matter has been deferred until the next board meeting.
The Central Board of Trustees (CBT) headed by the Labour Minister is the apex decision-making body of the EPFO that finalises the rate of interest on PF deposits for the financial year.
The proposal requires the concurrence of the Finance Ministry after approval by the CBT.
The EPFO had provided a five-year low rate of interest of 8.55 percent to its subscribers for 2017-18. The body had kept the interest rate at 8.65 percent in 2016-17 and 8.8 percent in 2015-16. It provided 8.75 percent interest for 2013-14 as well as 2014-15. The rate of interest was 8.5 percent in 2012-13.