Employees Provident Fund Organisation: Pay Higher Interest of 8.5 % for 2012-13..!


Retirement fund body EPFO (Employees Provident Fund Organisation) recently decided to pay 8.5% interest rate to its more than  5 crore subscribers on their PF deposits for 2012-13, higher than 8.25% provided in the previous fiscal - 2012-13.

The decision was taken at the meeting of the Central Board of Trustees (CBT) chaired by Labour Minister Mr. Mallikarjun Kharge. CBT is the highest decision making body of the Employees' Provident Fund Organisation (EPFO).

After the CBT meeting, Mr. D. L. Sachdev, Secretary, All India Trade Union Congress (AITUC), said,  "A decision has been taken to pay 8.5 % interest on PF deposits … but we have expressed our reservations as we wanted higher interest rate"

Earlier, a note prepared by EPFO for consideration of the February 15, 2013 meeting of the Finance and Investment Committee (FIC) had said, "… 8.5% rate of interest for the year 2012-13 is feasible."

According to the EPFO's estimates, payment of 8.6% interest rate would result in a deficit of Rs. 240.49 crore whereas 8.5% interest rate on PF deposits for current fiscal would leave a surplus of Rs. 4.13 crore. At 8.25%, the fund would have had a surplus of Rs. 615 crore.

In FIC meeting held on February 15, 2013 union leaders refused to discuss the issue regarding payment of interest in the current fiscal -  2012-13 because the agenda note for the issue was not provided well in advance to them, sources said adding that the note was tabled during the meeting.

They had said the EPFO's estimates would now be directly tabled before CBT meeting held today, for final approval. The notification on interest rate is issued by the government after concurrence with the Finance Ministry.

Usually, EPFO announces interest rate at the beginning of the year, but there has been a delay this time. Trade unions have been pressing for an early meeting of the CBT to decide on the interest rate for the current fiscal - 2012-13.

EPFO had paid 8.25% interest to its subscribers for 2011-12, lower than the 9.5% disbursed in 2010-11.

Permanent PF Account Number..!

The CBT has also proposed that a permanent PF account number be issued to all members which will enable members to not seek a new number on change of jobs. An action plan has been formulated to create a central database, it said after the meeting.


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