PF Interest Rate: Retirement body Employees Provident Fund Organisation (EPFO) has lowered the interest rate on provident fund deposits to 8.55%, contrary to expectations that it will retain its 8.65% rate. According to PTI, the EPFO has about five crore members.
At the meeting of the Central Board of Trustees (CBT) on Wednesday, the EPFO decided to lower the interest rate despite media reports saying that the retirement body sold a portion of its investments in the exchange-traded funds (ETF) worth Rs 2,886 crore earlier this month to retain the 8.65% rate. In the financial year 2016-17, the EPFO had lowered the interest rate on EPF from 8.8% in 2015-16.
Here’s are the highlights of EPFO’s recent activities:
The EPFO earned Rs 1,054 crore as a return on the sale of ETFs this month.
Since August 2015, the EPFO has been investing in ETFs and has monetised them. So far, the EPFO has invested Rs 44,000 crore in ETFs, according to PTI.
EPFO Trustees were reportedly mulling to review the trustees may also review the proposal to credit the ETFs into the members’ EPF account due to the lack of financial literacy among a large number of members.
A draft bill to amend Employees Provident Fund & Miscellaneous Provisions Act was also expected to be vetted by the trustees, however, it is not clear if it was taken up. This bill proposes to give one time option to choose between the Employees Provident Fund scheme or National Pension System (NPS) run by Pension Fund Regulatory and Development Authority.