The Central Board of Trustees that the highest decision-making body of the that will meet in Guwahati during March 12to13 to decide on the interest rate on employees provident fund deposits for 2021 to 22.
The meeting was scheduled to be held in the first week of March but had to be rescheduled due to the labor minister’s other engagements and sources.
Employees Provident Fund Organisation For 2020 to 21 the Employees Provident Fund Organisation paid an 8.5% rate of interest to its subscribers on their accumulated Employees Provident Fund deposits.
The interest rate for 2019-20 was also the same at 8.5% was a 7 year low. Now, the EPFO has 6.44 crore contributing members.
Keeping a small amount as surplus and the Employees Provident Fund Organisation each year distributes the lion’s share of its income from investments as returns to its subscribers on their accumulated deposits.
The Employees Provident Fund Organisation does not take money from the exchequer for interest pay-out.
A decision on the rate is taken based on income projection for a financial year and an annual basis in the Employees Provident Fund Organisation receives approximately 1.8 lakh crore as a subscription.
That invests the accumulated corpus in debt and equity instruments in the ratio of 85:15.
In 2015 that the Employees Provident Fund Organisation has been investing in exchange-traded funds to build up an equity portfolio and this has enabled it to fetch higher returns.
The retirement fund body is likely to liquidate some of its investments in the Employees Provident Fund Organisation before March this year for paying out interests to its subscribers.
Following the CBT’s recommendations that the proposal goes to the finance ministry for its concurrence.
After the labor ministry notifies the interest rate before the Employees Provident Fund Organisation starts crediting the same into individual accounts.
The Employees Provident Fund & Miscellaneous Provisions Act in 1952 makes it mandatory for all establishments having 20 or more employees earning less than 15,000 monthly wages to join the EPF scheme.
Others can join the scheme voluntarily. An employee contributes 12% of the basic pay to Employees Provident Fund her employer contributes 3.67% to the EPF and the rest 8.33% towards the employee’s pension scheme.
The interest rate for 2019 to 20 was also the same at 8.5% which was a 7 year low. The Employees Provident Fund Organisation has 6.44 crore contributing members.
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