On March 5, 2020, EPFO (Employees Provident Fund Organisation) has declined interest rate on EPF deposits for 2019-20 to seven years low by 0.15% or 15 basis points from 8.65% to 8.5%. The decision has been taken during the meeting of EPFO’s apex decision making body, Central Board of Trustees (CBT) chaired by Minister of State (MoS) for Labour and Employment Santosh Kumar Gangwar in New Delhi. Now, the proposal is sent to the Finance Ministry, only after its nod the interest amount is credited to the accounts of the subscribers.
Key Points:
-With this move, EPFO will have a surplus of over Rs 700 crore for this fiscal.
-This EPF interest rate for the current fiscal is lowest since 2012-13, when it was 8.5%.
-This downward revision of interest rate was recommended by Finance Investment & Audit Committee (FIAC) with an interest rate of 8.45% but EPFO went for 8.5%.
Other Approvals:
i.Amendment in EPS: EPFO decided to restore pension commutation under the Employees’ Pension Scheme (EPS) to benefit 6.3 lakh pensioners. This move is applicable for those who opted for commutation of their pension on or before September 25, 2008 under the erstwhile paragraph 12A of this scheme.
- In this regard the Employees’ Pension Scheme run by the EPFO has been amended.
- The provision for pension commutation of pension was withdrawn by the EPFO. Now, the facility has been restored for all those who opted for it on or before September 25, 2008.
- Pension commutation refers to part-withdrawal of fund in advance by a subscriber, who then gets reduced pension amount for 15 years.
ii.EPFO also approved a proposal to empanel the Jammu and Kashmir Bank as one of the banks for the collection of EPF dues in J&K.
About EPFO:
Establishment– 1952
Headquarters– New Delhi
Works under– Ministry of Labour & Employment
Central Provident Fund Commissioner (CPFC)– Sunil Barthwal
