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EPFO to retain interest rate at 8.55% for FY19 in Feb 21 meeting: Reports

Press Trust of India/New Delhi 11 Feb 19 | 05:20 PM

Retirement fund body EPFO is likely to retain the interest rate on employees' provident fund at 8.55 per cent rate for the 2018-19 fiscal, for its 60 million subscribers, a highly-placed source said.

"The proposal for providing the interest rate for the current fiscal would come up in the meeting of EPFO trustees on February 21," the source said.

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"The interest rate would be retained at 8.55 per cent for the current fiscal, as provided in 2017-18, in view of the forthcoming Lok Sabha elections. The EPFO's income projections for the current fiscal would be tabled at the meeting."

However, the source did not completely dismiss speculation that the interest rate on EPF deposits for this fiscal could exceed 8.55 per cent in view of Lok Sabha elections.

ALSO READ: EPFO subscribers may be allowed to invest more in equity markets in 2019

The Central Board of Trustees headed by Labour Minister is the apex decision making body of the EPFO which finalises rate of interest on PF deposits for a financial year.

Once approved by the CBT, the proposal requires the concurrence of the Finance Ministry. The interest rate is credited to the subscribers account after the Finance Ministry's approval.

The EPFO had provided a five-year low rate of interest of 8.55 per cent to its subscribers for 2017-18. The body had kept the interest rate at 8.65 per cent in 2016-17 and 8.8 per cent in 2015-16. It provided 8.75 per cent interest for 2013-14 as well as 2014-15. The rate of interest was 8.5 per cent in 2012-13.

Other important issues that can come up for discussion in the CBT meeting next week include appointment of new fund managers and review of investment made by the EPFO in exchange trade funds (ETFs).

ALSO READ: EPFO payroll data: 827k new jobs in October; 7.9 million in 14 months

The EPFO had started investing in the ETFs in August 2016. Presently it invests 15 per cent of its Rs 1.5 crore investible deposits at hand every year in the ETFs. It has invested around Rs 50,000 crore in the ETFs so far.

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