For 2021-22, the government had approved a four-decade-low interest rate of 8.1 per cent on employee provident fund deposits
The interest rate on the employees’ provident fund (EPF) is likely to be revised, even as the retirement fund body EPFO’s board meets on Monday. Apart from interest rate revision, the board is also likely to discuss the issue of higher pension and to allow its smooth implementation, according to media reports.
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According to an ET report recently, the government might peg the interest rate on PF deposits at about 8 per cent for the financial year 2022-23, as compared with 8.1 per cent currently. It is recommended by the EPFO’s Finance Investment and Audit committee based on the earnings for 2022-23.
The EPFO’s central board, Central Board of Trustees, is a tripartite body of the EPFO involving government, workers and employers’ representatives and the decision of CBT is binding on EPFO. It is headed by the labour minister.
For 2021-22, the government had approved a four-decade-low interest rate of 8.1 per cent on employee provident fund deposits. The 8.1 per cent EPF interest rate was the lowest since 1977-78, when it stood at 8 per cent.
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The 8.5 per cent interest rate on EPF deposits for 2020-21 was decided by the Central Board of Trustees (CBT) in March 2021.
EPF is a mandatory savings scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. It is managed under the aegis of Employees’ Provident Fund Organisation (EPFO). It covers every establishment in which 20 or more persons are employed. The employee has to pay a certain contribution towards the provident fund and the same amount is paid by the employer on a monthly basis.
At the end of retirement or during the service (under some circumstances), the employee gets the lump sum amount including the interest on PF contributed which gets accrued. Nearly 4.9 crore new subscribers joined Employees’ Provident Fund (EPF) scheme during September 2017 to November 2021 period, government data showed.
