Bengaluru/New Delhi: Retirement fund body EPFO on Monday slashed interest on deposits to a four-year low of 8.65 percent this fiscal.
The move was undertaken in tandem with falling rates on savings due to surge in bank deposits post demonetisation.
Here are the key fact about the move:
- The Employees Provident Fund Organisation (EPFO) had provided 8.8 percent rate of interest on deposits for 2015-16 to its four crore contributing subscribers.
- It maintained 8.75 percent for 2013-14 and 2014-15 while it was 8.5 per cent in 2012-13.
- The Finance Ministry has been reportedly asking the Labour Ministry to bring the EPF interest rate in alignment with other small saving schemes like PPF of the government.
- Earlier this year, it lowered interest rate on EPF for 2015-16 to 8.7 percent from 8.8 percent approved by the CBT but the step was retracted after protests by trade unions.
- Interest income from PF investments for 2016-17 has been estimated mainly on the basis of interest income received or receivable in this financial year, including surplus of Rs 410 crore from previous year, an official said, as per PTI.
- The CBT also recommended to abolish administrative charges levied in implementing the Employees Deposit Linked Insurance Scheme, 1976 passing on the benefits of efficiency and computerisation to employers, a Labour Ministry statement said.
- The Central Board also decided to constitute a sub-committee of CBT with members drawn from employees and employer representatives to make a pragmatic study of employment trends for next 10 years and recommend appropriate administrative charges to the Central Board, it added.
- Union Minister of State for Labour and Employment Bandaru Dattatreya said that a campaign will be undertaken to meet the twin objectives of increasing the enrolment of new workers, thereby extending social security benefits to all workers and reduce litigation.
- A target of enrolling 50 lakh workers has been set for the first phase.
- He said the campaign from January 1, 2017 to March 31, 2017 would focus on a large unorganised sector which constitutes 92 percent.
- According to the statement, the 8.33 per cent of the employer's contribution proportionate to the salary of employees in excess of Rs 6,500 shall now be credited to the pension scheme along with the interest accrued in the provident fund account.
- The employees, however, shall be required submit joint application along with their employer wherever the same has not been done, it said.
- This will be applicable only in those cases where the members/pensioners have contributed on higher wages than the statutory wage ceiling of Rs 6,500 with or without exercise of option prior to the issue of notification for increase of wage ceiling to Rs 15,000 effective from September 1, 2014.
(With PTI inputs)