EPFO board to meet this month: Here's what to expect
1 min read 05 Mar 2023, 01:51 PM ISTThe assured fixed return approach of EPFO, announced by CBT every year along with the tax exemptions makes an attractive savings option for the PF members
PremiumRetirement fund body EPFO is likely to meet at the end of the current month to decide on the interest rates for provident fund deposits for 2022-23. Among government-backed financial instruments, EPFO is still the highest-paying scheme at 8.1%. The assured fixed return approach of EPFO, announced by CBT every year along with the tax exemptions makes an attractive savings option for the PF members.
The Central Board recommended 8.10% annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2021-22. The interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into its subscribers’ accounts.
EPFO despite following a conservative approach towards investment, has consistently generated high returns over the last many years which has enabled it to distribute higher interest to its subscribers, through various economic cycles with minimal credit risk.
Traditionally, EPFO has been able to give a higher rate of interest on retirement savings in comparison to other available investment options because of its prudent investment policy of investing in long tenor high yielding securities for the past several decades. This has ensured that the returns on EPFO’s investments are higher even when the yields have been steadily coming down in the past decade.
According to a report published in Economic Times, the EPFO's Central Board of Trustees can keep the interest rate at 8% likely for 2022-23.
According to the Employees Provident Fund Organisation (EPFO) circular on December 29, 2022 the central government has directed to implement the directions in the Supreme Court order.
The field offices have been directed to implement "the directions contained in para 44 (ix) of the Supreme Court judgement on November 4, 2022" within stipulated timeline and to ensure adequate publicity of the decision taken by the EPFO to implement the said directions, the circular said.
Earlier in November 2022, the Supreme Court had upheld Employees Pension (Amendment) Scheme 2014.
The EPS amendment of August 22, 2014 had raised the pensionable salary cap to ₹15,000 a month from ₹6,500 a month, and allowed members along with their employers to contribute 8.33 per cent on their actual salaries (if it exceeded the cap) towards the EPS.
