Finance Ministry Lowers EPF Rate to 8.7 Percent [ Current Affairs ]
The Finance Ministry has approved 8.7 percent interest on PF deposits for over five crore subscribers of retirement body EPFO, which is lower than 8.8 percent decided by the Central Board of Trustees (CBT).
About the decision made by Finance Ministry to lower the rate:
- The Central Board of Trustees proposed the rate of interest at 8.8%, which will be credited into employees’ accounts Provident Fund subscribers for 2015 - 16.
- While the Finance Ministry has approved this interest rate of 8.8 % to 8.7%.
- Earlier, EPFO had provided 8.75 percent rate of interest in 2013 - 14 and 2014 - 15, and in 2012 - 13, this rate was 8.5 percent and 8.25 per cent in 2011 - 12.
- The estimation by EPFO expected that the body could easily pay 8.95 percent rate of interest, as it would leave extra of Rs. 100 crore.
- The EPFO pays rate of return to its subscribers on the basis of returns it generates from its investments.
- However, the employees representatives’ demand for 9 percent rate of interest for the fiscal 2015 - 16.
- EPFO stands for Employees’ Provident Fund Organization.
- The Employees’ Provident Fund came into force with the declaration of the Employees’ Provident Fund Ordinance on 15th November, 1951.
- Then it was replaced with the Employees’ Provident Fund Act, 1952.
- Now, it is known as Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.
- It is used in whole states of India except Jammu & Kashmir.
- Published on: April 26, 2016