EPF Interest Rate Rise: During a two-day meeting, the Central Board of Trustees of the Employees’ Provident Fund Organisation (EPFO) recommended a slight increase in the interest for Provident Fund deposits. Union Labour Minister Bhupender Yadav stated that the new rate will be 8.15% in 2022-23.
The Central Board Trustees (CBT) EPF recommends 8.15 % rate of interest to EPF subscribers for FY2022-23
The interest rate would be officially notified in the government gazette after approval of Ministry of Finance
Read here: https://t.co/2270xMdn7a@LabourMinistry
— PIB India (@PIB_India) March 28, 2023
Delays in Implementing the Supreme Court’s Recent Verdict
The gathering also touched on the delay in implementing the Supreme Court’s recent decision on increased PF pensions. The Centre is working to implement the Supreme Court order, and the EPFO is being encouraged to make the filing of options easier.
Recommendations for a More Accessible Process
Members proposed that because the majority of the applicants were seniors, they should not be asked to run around and complicate the process. A member suggested that the sought joint declaration is tough to fulfill, and retirees may have migrated to their native places, making the process difficult. The EPFO agreed to provide a detailed explanation in layman’s words, as well as a list of frequently asked questions and responses.
Government Gazette Approval for Interest Rate Notification
Following approval from the Ministry of Finance, the interest rate would be formally announced in the government gazette, and the EPFO would credit the rate of interest into the accounts of its subscribers.
Safeguarding the Surplus Fund
To have safeguards, the CBT suggested balancing both the growth and surplus funds. The suggested rate of interest of 8.15% protects the surplus while also providing increased income to members.
Mapping a Five-Year Plan on Capital Expenditure
The meeting also agreed to develop a five-year capital expenditure strategy to ensure that most EPFO offices have buildings and infrastructure by the end of the five-year period. This has a capital of 2,000 crore.
EPFO’s Investment in Exchange-Traded Funds (ETFs)
Another topic discussed at the gathering was the EPFO’s investment in exchange-traded funds. (ETFs). Members expressed concern that only about 10% of deposits are now invested in ETFs, despite receiving 10% interest, and questioned the pension fund manager why it had not invested up to the 15% limit in ETFs.
EPFO’s Investments in Adani Group Stocks
Attendees raised the issue of the EPFO’s investment in exchange-traded funds (ETFs), as the EPFO is allowed to invest 15% of its deposits in ETFs, but only about 10% of the deposits are invested in ETFs. They also raised concerns about the EPFO’s investments in Adani Group stocks, to which according to the officials, the choice to invest in stocks is based on the top 50 shares of the National Stock Exchange.
Read more:- Complete Guide on How to Vote in India
Final Thought
Overall, the Central Board of Trustees of the Employees’ Provident Fund Organisation (EPFO) decided to recommend an increase of 0.05% in the interest rate for Provident Fund deposits for 2022-23, resulting in a rate of 8.15%.
The EPFO is also working on implementing the Supreme Court’s verdict on higher PF pension, with efforts to simplify the filing process for applicants. The EPFO’s prudent and balanced approach towards investment, with emphasis on safety and preservation of principal, has resulted in the interest rate of the EPFO being higher than other comparable investment avenues available for subscribers. The EPFO also plans to invest more in ETFs and map a five-year plan for capital expenditure to enhance infrastructure.
Like this post?
Register at One World News to never miss out on videos, celeb interviews, and best reads.
