AITUC seeks labour minister's intervention against alleged malafide campaign to reduce EPF interest rate
The AITUC shot off a letter to Gangwar on July 29, after a report suggested that there were withdrawals to the tune of Rs 30,000 crore in April-June this year during the coronavirus-related lockdown.
The interest rate is a big sentiment booster and any cut may further hit the employee sentiment.
EPFO may cut 8.5% rate declared for FY20 because of declining return on investments and cash flow.
The coronavirus-led stock market crash or the sharp drop in equity market has dented its corpus.
Retirement fund body EPFO on Thursday lowered interest rate on provident fund deposits to 8.5 per cent for the current financial year, said Labour Minister Santosh Gangwar on Thursday. The EPFO had provided 8.65 per cent rate of interest on EPF for 2018-19 to its around six crore subscribers. The decision was taken at a meeting of the the Employees' Provident Fund Organisation's (EPFO) apex decision making body -- the Central Board of Trustee.EPFO slashes interest rate on deposits to 8.5% for FY20
The Central Board of Trustees of the Employees' Provident Fund Organisation (EPFO) has recommended increasing the interest rate on Employees' Provident Fund for 2018-19 to 8.65% as against 8.55% in the preceding year. The move, once approved by the finance ministry will benefit six crore EPFO subscribers.Govt hikes EPF interest rate to 8.65% for FY18-19
"...ahead of the festival season, over 6 crore EPFO subscribers would get 8.65 per cent interest for 2018-19," said Labour Minister Santosh Gangwar.
The move, once approved by the finance ministry, will benefit six crore EPFO subscribers.
In addition to their normal contribution to EPF, employees can benefit from this higher interest rate by voluntarily contributing more – i.e. through VPF.
Last year, the EPFO had cut interest rate to 8.65%. Now rates have slipped further. ET Wealth spoke to three experts for their views on whether the rate should be cut.
The Finance Ministry had decided to lower the EPF interest rate of 8.8 per cent for 2015-16 to 8.7 per cent. The decision drew flak forcing the government to uphold 8.8 per cent.
CPI(M) member Tapan Kumar Sen slammed the "unilateral, undemocratic" action by the Ministry, saying it had completely ignored the unanimous decision.
Labour Ministry sources said the Ministry will seek review of the Finance Ministry's decision as EPFO has sufficient income in 2015-16 to pay higher returns.
The circular emphasises that any deficit in interest declared by the board of trustees is to be made good by the employer to bring it up to the statutory limit.
The backpedalling follows the uproar sparked by the finance ministry scaling down the 8.8% recommended by the CBT of the Employees’ Provident Fund Organisation (EPFO).
Finance Ministry in its communication to the Labour Ministry has, however, put a rider that the interest rate should not result in a deficit for the retirement fund.
Reports suggest that the Finance Ministry is nudging the Labour Ministry to lower the EPF interest rate by up to 50 basis points.
A proposal to revise the interest rate of Employees Provident Fund (EPF) by .25 per cent is under the consideration of the government.
Kharge has clarified that a decision on the employee's provident fund interest rate for the current fiscal was yet to be taken and it had not been fixed at 8.6%.
Interest rate on employees' provident fund will be increased to 8.6 per cent for the current fiscal, a move which will benefit around five crore subscribers.
4.4 crore subscribers of the Employees Provident Fund (EPF) will receive a payout of 8.5% interest rate for fiscal 2009, the third year in a row.
The over 4.5 cr subscribers to EPF will earn an interest payout rate of 8.5% even as banks lower their rate for deposits. Making of Budget: Whys and Wherefores?
Employees Provident Fund Board agreed to continue paying 8.5 per cent interest rate to its nearly four crore subscribers.
The decision to retain the rate at 8.5%, third time in a row, comes at at time when the banking regulator is expected to effect a rate cut in the wake of a marked economic downturn.
The Employees Provident Fund (EPF) is expected to retain the interest rate for its six crore account holders at 8.5 per cent in 2010-11, with a formal announcement likely to be made in August.
The BJP on Sunday joined the growing chorus of voices seeking a complete waiver of interests on the debts accumulated by the farmers in the areas hit by repeated crop failure.
Amidst reports of a cut in interest rates on the Employees Provident Fund (EPF), labour minister Sis Ram Ola has said he will meet finance minister P Chidambaram to decide on returns for more than 3.2-crore subscribers this year.
Much to the relief of employees, Labour minister, Sahib Sigh Verma ruled out a further cut in the interest rate on EPF presently at 9.5%.
Speculations are rife that the interest rate on EPF may be lowered to 8.5% for the current fiscal, a tad lower than 8.65% provided for 2018-19. As per sources, the agenda for the CBT meeting has not yet been finalised and it is difficult to predict EPFO's income projections for the current fiscal, which will be the basis for fixing the rate.
EPFO started to invest 5% of fresh inflows in index ETFs from August 2015. This was raised to 10% in 2017 and later to 15% in 2018. EPFO’s maiden foray into equities initially proved bountiful but got a rude shock in March this year.
The EPFO has been settling EPF withdrawal claims at 8.55 per cent interest rate, approved for 2017-18. Now, the EPFO will settle accounts on higher rate of 8.65 per cent for 2018-19.
Even if the EPF rate is cut, the difference would remain substantial thereby disadvantaging the self-employed class in terms of retirement savings.
The EPFO had lowered the rate of return for its over 4.5 crore subscribers to 8.65 per cent for 2016-17, from 8.8 per cent in 2015-16.
Does EPFO have sufficient surplus left for honouring this year's interest rate? The jury's still out.
The Finance Ministry has been nudging the Labour Ministry to lower the EPF rate for aligning it with the rates of small savings schemes like PPF.
The rate is in line with that for Public Provident Fund. In July-September quarter too, the interest rate was 7.8 per cent.
The ratification of the 8.65 per cent on EPF will enable the retirement fund body EPFO to credit this rate of return into the accounts of four crore subscribers.
The government had to roll back the decision and provided 8.8 per cent rate of interest on EPF deposit for last fiscal following protests by trade unions.
Union Labour Minister Bandaru Dattatreya today denied having any differences with the Finance Ministry over the EPF interest rate.
Earlier this year, govt had rolled back its decision to lower interest rate on EPF deposits to 8.7% for 2015-16 and fixed it at 8.8%
If you had initiated a transfer process from the 'online transfer claim portal' any time after March 1, 2017, you will have to resubmit your claim.
The new Aadhaar linked 'composite claim form' can be used for availing benefits as under EPF Form 19, Form 10C and PF part withdrawals Form 31.
The actual annualised returns of financial instruments vary from the quoted rates due to different methods of calculations involved and taxation rules.
The finance ministry had last month reduced interest rate on small saving schemes including PPF scheme and KVP to 8.1% and 7.8%, respectively
The Central Board of Trustees will meet this month to decide on hiking the EPFO’s stock market exposure to 15% of the incremental flow from the current 10% .
This facility will be available to all those subscribers whose UAN is activated and seeded with the KYC details like bank account and Aadhaar number.
Worried over political implications of PF interest rates cut amid state elections, govt has decided to defer its decision on the rate till elections end.
If 5 per cent of monthly contributions was invested in a Nifty ETF, the corpus would only be 2.4 per cent bigger today.
Amid pressure by Left-backed trade unions not to tinker with the current 8.5 per cent interest rate on Employees Provident Fund, the government today said it will try to retain the rate for the four crore EPF subscribers in the country.
These days, when interest rates in general are on their way down while the rate on EPF is still towering high, employees may consider increasing their VPF contribution.
In keeping with market realities, the finance and investment panel has asked the EPFO to maintain an 8% interest payout for FY06.
Here are articles on how to calculate your PF balance, how to check your EPF balance, benefits of linking your EPF to your Aadhaar and so on.