The Employees Provident Fund Organization (EPFO) have finally agreed to increase interest rates paid to subscribers to 8.5% during the current fiscal, an increase of 0.25% compared to the last fiscal.
There were a proposal of paying 8.6% interest, but the EPFO's calculations showed that it would be left with a deficit of over Rs 240 crore if it agreed to it. At 8.5%, it now will have a surplus of a little over Rs 4 crore. The recommendation of the central board of trustees' (CBT) now needs to be notified by the finance ministry before actual payouts begin.
At Monday's meeting, union representatives, however, had their way on stock market investment by the entity and shot down a proposal by the finance ministry to allow EPFO to park funds in the equity market. "We have strongly rejected any attempt to link EPF funds to the stock market," Kumar said. But, the board accepted some relaxations in investment in public and private sector bonds, EPFO commissioner Anil Swarup said after the meeting.
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