The governmentâ€™s Employees’ Provident Fund Organisation cut the interest rate on provident fund deposits to a seven-year low of 8.5 percent for 2019-20. The EPF interest rate was 8.65 percent in 2018-19. It stood at 8.55 percent in 2017-18, 8.65 percent in 2016-17, 8.8 percent in 2015-16, 8.75 percent in 2014-15 and 2013-14, and 8.5 percent for 2012-13. The rate-cut decision was taken at a meeting of EPFO’s apex decision-making body-the Central Board of Trustee.
The new rate is 15 basis points below the figure for the previous financial year, impacting earnings of its over 60 million active subscribers. The last time EPFO had paid an 8.5% rate was 2012-13.
â€œKeeping everything in mind, we have decided to pay 8.5% interest rate,” labour minister Santosh Gangwar said after the EPFOâ€™s central board of trustees (CBT) meeting in New Delhi.
Though the minister did not elaborate, EPFO authorities said lower earnings from debt investments and the need to have a better surplus to keep the financial health of the organisation were among reasons for the decision.
The EPFO on Thursday also ratified and appreciated restoration of normal pension after 15 years from the date of commutation, which will potentially benefit about 630,000 pensioners who had opted for partial withdrawal on or before 25 September 2009.