PF deposits may fetch minimum 8.5% return this in FY14
18 Nov 2013
Subscribers to the Employees Provident Fund Organisation (EPFO) will get a minimum return of 8.5 per cent on their provident fund deposits for the current financial year (2013-14), equal to that paid for the 2-12-13 financial year.
The EPFO, which has over fifty million subscribers, had raised the interest rate on PF deposits from 8.25 per cent to 8.5 per cent in 2012-13, and is expected to maintain at least that rate for the current financial year as well.
A decision in this regard is expected to be taken as early as next month.
"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," the official added.
Workers unions have been demanding higher interest payment on PF deposits, matching the current interest rate structure of banks and corporate bonds. They have also been pressing the labour ministry to urgently convene a meeting of PF trusties to decide on the interest rate.
The CBT was reconstituted in May, but its sub-committees whose term of office is co-terminus with the CBT could not be reconstituted.
This was because the CBT has not held any meeting so far since it was reconstituted in May, EPFO sources said, adding that the 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 Finance and Investment Committee (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 EPFO, which is vetted by the FIC and goes to CBT for final consideration. Once approved by the CBT, a decision requires concurrence of the finance ministry, which has to notify it. Only after notification, the interest is credited into accounts of subscribers.
EPFO is expected to announce rate of interest on PF deposits before the beginning of a financial year.
