New Delhi: Provident Fund is a long term savings instrument for lakhs of employees. However, several members and representatives had in the past few times brought up the problem of the EPF's interest rate not being credited, which was set at 8.1% for the years 2021–2022.


COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The most common concern being, if the PF subscribers would lose their money if their provident fund passbook is not updated timely?


Allying fears of the EPFO employees, Minister of State for Labour and Employment Rameshwar Teli  said that 98% of contributing businesses or establishments have updated their employee provident fund (EPF) member accounts with the most recent interest credit through March 6, 2023.


"This (interest crediting) is an ongoing process, which has been taken up in a scheduled manner post development of software and by March 6, 2023, the process has been completed in respect of 98 per cent of contributory establishments," stated Minister Rameshwar Teli.


According to Teli, account updation with interest credit is a thorough activity that necessitates examination of each and every transaction done in relation to each and every member's account, making the entire procedure exceedingly time-consuming.


According to him, accounts of members of 98% of contributory establishments have had interest credited to them as of March 6, 2023. He added that this is a continuing process that is completed on a scheduled basis without interfering with the normal claim settlements.  According to the minister, updating a member's passbook with interest is only an entry process; the date on which the interest is recorded has no real financial impact on the amount of interest earned for the year.


His running balances for each month are always added to the year's final sum. As a result, he continued, the member does not experience any financial loss.


He emphasised that the accounting procedure had to undergo a significant adjustment due to the implementation of the new TDS (tax deductions at source) provision from 2021–2022, making the exercise more time-consuming and necessitating an increased level of inspection.  The member's passbook needed to be updated as well in order to give them all the information they need in a more accessible and understandable way. According to him, the procedure needed the development of new software, testing, debugging, and stabilisation of crucial software components.


According to him, the Employees Provident Fund Organization (EPFO) has resolved more than 3.6 crore member claims with current interest.


According to Article 60 (1) of the Workers' Provident Fund (EPF) Plan, 1952, EPFO is required to credit interest to each member's account at a rate that may be decided by the Central government in agreement with the Employees' Provident Fund's Central Board of Trustees (CBT) (EPF).


With PTI Inputs