EPFO may credit first instalment of 8.5% interest by Diwali
- The EPFO central board in September said it will pay 8.5% interest to its subscribers for the year ended 31 March
- The retirement fund body’s earnings were badly hit in March due to coronavirus pandemic
Employees' Provident Fund Organisation (EPFO) is likely to credit the first instalment of the 8.5% interest to its subscribers by Diwali, according to a report by Live Hindustan. The EPFO central board in September said it will pay 8.5% interest to its subscribers for the year ended 31 March. The interest rate be divided into 8.15% and 0.35%. While the government-managed fund may transfer 8.15% interest by Diwali, the rest of the 0.35% is likely to be credited by December, according to reports.
The retirement fund body’s earnings were badly hit in March due to coronavirus pandemic. "In view of exceptional circumstances arising out of COVID-19, the agenda regarding interest rate was reviewed by the central board and it recommended the same rate of 8.5% to the central government," the labour ministry earlier said.
"It (8.50% interest) would comprise 8.15 per cent from debt income and balance 0.35% (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020," the statement had mentioned.
"The rate of interest of 8.5% announced by the Central Board of Trustees surely will provide a cheer to the common man and is a welcome move from the perspective of individual members. However, meeting such a rate could pose a challenge for companies having Private PF Trusts who may not be able to generate adequate returns to meet this rate of interest especially given the covid times," said Divya Baweja, partner, Deloitte India.
In the wake of coronavirus pandemic, the EPFO earlier fast tracked settling of COVID-19 advances and illness related claims.It introduced auto mode of settlement for these two categories. Auto mode of settlement reduced the claim settlement cycle to just 3 days for most claims in these two categories against the statutory requirement to settle claims within 20 days.
As many as 38,71,664 employees provident fund (EPF) withdrawal claims worth ₹44,054.72 crore were settled since March 25, the central government said in September.
The central government also increased the maximum sum assured payable under Employees' Deposit Linked Insurance Scheme to ₹7 lakh from ₹6 lakh. This amendment will provide additional succour to families and dependents of members of the scheme in case of their unfortunate death while in service.
"The Central Board accorded approval for amendment of paragraph 22(3) of Employees’ Deposit Linked Insurance Scheme (EDLI), 1976 to enhance the maximum assurance benefit to ₹7 lakhs from the present maximum assurance benefit of ₹6 lakhs," the statement said.
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First Published:10 Oct 2020, 03:25 PM IST
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