EPFO News: If you are also a salaried class then this news is useful for you. The Employees’ Provident Fund Organization (EPFO) is planning to create a new reserve fund to give fixed interest rates to its crores of members.
With this step, PF account holders will be able to get fixed interest every year and they will get relief from market fluctuations. To prepare this fund, officials of the Ministry of Labor and Employment and EPFO are studying internally.
A fixed portion is invested in the market
Actually, a fixed part of the PF fund is invested in the market by EPFO. Many times EPFO gets less returns on Exchange Traded Fund (ETF) and other investments. EPFO members also have to bear the brunt of this. When there is a decline in the stock market, it also affects the amount received on EPFO’s investment. Due to low returns, EPFO also has to reduce the interest rate of PF.
To avoid such problems, EPFO is considering creating a reserve fund that will keep the return on investment stable. This will enable PF account holders to get fixed interest every year, no matter what the market conditions are.
How will this fund work?
According to the news published in Hindustan website, EPFO will keep aside a part of the interest earned every year under this scheme and deposit it in the reserve fund. Whenever there is a fall in the market and the return from investment is low, then the interest rate will be kept stable by using this fund. More than seven crore members of EPFO will benefit from this.
When will the decision be taken?
Right now the scheme is in the initial stage. Officials of the Ministry of Labor and Employment and EPFO are studying it. A final decision can be taken on this in the next four to six months. Let us tell you that when EPFO was started in 1952-53, at that time only 3% interest was available on PF. By 1989-90 it increased to 12%, which remained till the year 2000-01. After this, there were changes in it from time to time. Currently, the interest of EPFO in 2023-24 is 8.25%.
Important meeting will be held on 28 February
The Central Board of Trustees (CBT) of EPFO will meet on 28 February to decide the PF interest rate for the financial year 2024-25. There may be a discussion on keeping the interest rate stable or increasing it marginally. However, the possibility of reduction in interest rates is being said to be very low.
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