New Delhi, Sep 9: Retirement fund body Employees' Provident Fund Organisation (EPFO) on Wednesday decided to provide an interest rate of 8.15% as opposed to the prevailing 8.5%. It also decided to credit a part of the 8.5% interest on the employees provident fund (EPF) for 2019-20 into the accounts of its around six crore subscribers.
The decision to provide 8.15% interest on EPF was taken at the EPFO trustees meet held on Wednesday, a source told news agency PTI. The remaining 0.35% rate of interest on EPF for 2019-20 would be credited into the subscribers account in December this year, the source added.
The EPFO had earlier planned to liquidate some of its investments in exchange traded funds to meet the deficit for providing 8.5% interest for the last fiscal.
However, it could not do so because of the choppy market conditions amid the lockdown induced by COVID-19.
The EPFO's apex decision-making body, the Central Board of Trustees (CBT), will meet again in December and take a call on crediting the remaining 0.35% interest into its subscribers accounts.
The issue was not listed on the agenda. However, some trustees raised the issue of a delay in crediting the interest into subscribers' accounts.
The board, headed by Labour Minister Santosh Gangwar, had decided to provide 8.5% interest rate for 2019-20 in its meeting held in March this year.
In February, before the country had gone into lockdown, 5,20,566 companies had paid their employees’ and employers’ contributions for February, EPFO data said. In April however, there was a plunge of 37% from March, with only 3,21,800 companies paying their contributions.
In the first week of March, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5% for the current financial year. The EPFO had provided 8.65% rate of interest on EPF for 2018-19.