In March this year, Employees' Provident Fund Organisation's (EPFO) apex decision making body Central Board of Trustees headed by Labour Minister Santosh Gangwar had approved 8.5 per cent interest rate on EPF for last fiscal.
Retirement fund body EPFO on Wednesday decided to provide 8.5 per cent rate of interest on employees’ provident fund(EPF) for 2019-20 as committed earlier.
In March this year, Employees’ Provident Fund Organisation’s (EPFO) apex decision making body Central Board of Trustees headed by Labour Minister Santosh Gangwar had approved 8.5 per cent interest rate on EPF for last fiscal.
In a virtual CBT meeting on Wednesday, the EPFO has decided to provide 8.5 per cent rate of interest, a labour ministry statement said.
“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 8.50 per cent to the Central Government.
“It (8.5 per cent interest) would comprise of 8.15 per cent from debt income and balance 0.35 per cent (capital gain) from the sale of ETFs (exchange-traded funds) subject to their redemption by 31st December, 2020,” the statement said.
The board has recommended accounting such capital gains (from sale of ETFs) in the income of the financial year 2019-20 as being an exceptional case.
According to a source, the EPFO will provide 8.15 per cent interest on EPF soon and the remaining 0.35 per cent rate would be credited into the subscribers’ account by December 31, after proposed liquidation of ETFs.
The EPFO had earlier planned to liquidate some of its investment in ETFs to provide 8.5 per cent interest for the last fiscal.
However, it could not do so because of the choppy market conditions amid the lockdown, induced by COVID-19.
Now after reassessing the situation, the CBT found that the EPFO can provide 8.5 per cent interest rate on EPF for 2019-20.
Besides, the CBT also decided to hike the maximum sum assured payable under Employees’ Deposit Linked Insurance Scheme 1976 to Rs 7 lakh from existing Rs 6 lakh.
“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 Rs 7 lakhs from the present maximum assurance benefit of Rs 6 lakhs,” the statement said.
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 CBT was also informed that the actuarial valuation of EDLI Fund has allowed for continuation of minimum assurance benefit of Rs 2.5 lakh beyond February 14, 2020, and extension of minimum assurance benefit of Rs 2.5 lakh to the family of those deceased members who were employed in multiple establishments during the 12 months preceding the month in which they died, as approved by the board in its 226th meeting.
During the meeting, Gangwar also launched virtual hearing facility in quasi-judicial cases under EPF&MP Act, 1952 through video conferencing.
The aim of integration of virtual hearing utilities with EPFO’s e-Court process on Compliance e-Proceedings Portal is to eliminate the physical presence of parties in hearings before Adjudicating Officer.
The system entails savings on time, travel and expenditure for parties, ensures compliance to social distancing norms during the pandemic and fast tracks assessment of worker’s EPF dues to generate better confidence in the quasi-judicial mechanism.
It is a critical development towards the objective of faceless quasi-judicial proceedings in the EPFO.