EPFO: The central government is considering creating a fund reserve to provide uninterrupted and uniform interest to the 6 crore 50 lakh members of EPFO. With this step of the government, PF account holders will get uniform interest every year and they will be relieved from the fluctuations in the market.
EPFO News: If you are also a salaried class, then this news is of your use. The Employees Provident Fund Organization (EPFO) is planning to create a new reserve fund to give fixed interest rate to its crores of members. With this step, PF account holders will be able to get fixed interest every year and they will get rid of the fluctuations of the market. To prepare this fund, officials of the Ministry of Labor and Employment and EPFO are studying internally.
A fixed part is invested in the market
Actually, a fixed part of the PF fund is invested in the market by EPFO. Many times EPFO gets low returns on Exchange Traded Funds (ETF) and other investments. EPFO members also have to bear the brunt of this. When there is a decline in the stock market, it also affects the amount received on EPFO’s investment. Due to low returns, EPFO also has to reduce the interest rate of PF.
To avoid such problems, EPFO is considering creating a reserve fund, which will keep the return on investment stable. This will enable PF account holders to get fixed interest every year, no matter what the market conditions are.
How will this fund work?
According to the news published in Hindustan website, EPFO will keep a part of the interest earned every year under this scheme and deposit it in the reserve fund. Whenever there is a decline in the market and the return from investment is low, then the interest rate will be kept stable using this fund. This will benefit more than seven crore members of EPFO.
When will the decision be taken?
The scheme is still in its initial stage. Officials of the Ministry of Labor and Employment and EPFO are studying it. A final decision can be taken on this in the next four to six months. Let us tell you that when EPFO was started in 1952-53, at that time only 3% interest was available on PF. By 1989-90 it increased to 12%, which remained till the year 2000-01. After this, there were changes from time to time. Currently, the interest rate of EPFO in 2023-24 is 8.25%.
Important meeting will be held on 28 February
The Central Board of Trustees (CBT) of EPFO will meet on 28 February to decide the PF interest rate for the financial year 2024-25. In this, there may be discussion on keeping the interest rate stable or increasing it marginally. However, the possibility of reduction in interest rates is being said to be very low.
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