The government has initiated a slew of measures to modernise services offered by the Employees’ Provident Fund Organisation (EPFO), which is keen to enhance subscribers’ experience while using the retirement fund body’s portal.
Meanwhile, the EPFO’s apex decision-making body Central Board of Trustees (CBT) will meet on February 28 to finalise the interest rate on provident fund deposits for the current financial year (2024-25). The CBT meeting takes place every quarter.
The CBT, led by the Union Minister for Labour and Employment, also includes representatives from employee associations, trade unions and government officials from both central and state governments.
The EPFO currently offers an interest rate of 8.25% on provident fund deposits and reports suggest that the retirement fund body might continue with the same rate for the ongoing financial year. The rate has to be first approved by the CBT on February 28 before it is ratified by the finance ministry.
Also read: EPFO 3.0: 12 pc employee’s contribution cap to be removed? Labour ministry mulls bold reforms in PF services
EPFO rate trends
The current rate (for FY 2023-24) of 8.25% is the highest offered by the EPFO in the last three years. For the financial year 2022-23, the interest rate was 8.15%.
The lowest rate in recent times was 8.10% in 2021-22, the lowest since 1977-78, when it was 8%. Over the last decade, the EPFO kept changing the interest rates, with the highest at 9.50% in 2010-11. Between 2019 and 2021, rates remained steady at 8.50%.
Is govt mulling fixed return on EPF deposits?
The centre is reportedly mulling offering a fixed interest rate on EPF deposits to ensure stability in returns for crores of EPFO members.
The government is reportedly mulling over a proposal to create an interest stabilisation reserve fund, which will facilitate maintaining a steady interest rate. According to a report by the Economic Times, this proposal is still in its early stages and the Labour and Employment Ministry is studying the viability of the proposal.
How does govt invest EPF deposits?
The EPFO regularly invests in equity markets through Exchange Traded Funds (ETFs) replicating BSE-SENSEX and NSE NIFTY-50 indices. In addition, the retirement fund body also invests from time to time in ETFs constructed specifically for the disinvestment of shareholding of the Government of India in body corporates,
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