PF interest rate raised marginally

The decision was taken at the meeting chaired by Union Minister of state for Labour and Employment Bandaru Dattatreya here on Tuesday. The financial audit and investment committee (FAIC) of the EPFO in January underlined that its earnings in 2015-16 has the potential to offer a rate of 8.95 per cent. Mr Dattatreya said that the hike is an ‘interim one’ and indicated that it could be further revised later. 

The minister said “there is global slowdown and interest rates in India are also coming down.” The Reserve Bank of India and other Central government organisations are monitoring the market trends. 

“We had last time given 8.75 per cent and this time, seeing the situation, we are declaring 8.8 per cent for the workers,” he told reporters after the 211th meeting of the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO). He said while trade unions had demanded that the interest rate be fixed at 8.9 per cent, the government had revised it to 8.8 per cent underlining the Centre’s commitment to the working class. 

“We don’t want to have a backward outlook. We want a forward outlook. We want to safeguard the workers’ interest. We want to give a real and purposeful picture before the workers and that is why a long debate took place today,” he said. 

On trade unions’ demand for 8.9 per cent interest rate, he said, if that was implemented, the ‘surplus’ with the government would be Rs 285 crore. 

And in the case of 8.8 per cent, the surplus would be Rs 673 crore, Mr Dattatreya explained. 

The interest rate is a slight increase from 8.75 per cent interest rate pay out in 2014-15. In fact, the 8.8 per cent interest rate on EPFO is the highest since 2010-11 when the EPF savings earned a 9.5 per cent.