EPFO to fix interest on PF

Interest on PF for FY16 may be Fixed on November 24

November 30, 2015

Employees’ Provident Fund Organisation (EPFO) trustees are likely to consider and approve a proposal to fix a rate of interest on PF deposits for over five crore subscribers for the current fiscal year in their meeting scheduled for November 24.

“209th meeting of the Central Board of Trustees (CBT) has been scheduled to be held on November 24, 2015,” an official order stated.

A source said, “The proposal regarding fixing rate of interest on PF deposits for 2015-16 is likely to be taken up by the CBT in its next meeting.”

Retirement fund body EPFO had provided 8.75 per cent interest on PF deposits for 2013-14 and 2014-15.

“Apart from this, the CBT headed by Labour Minister may also take up two separate proposals to allow its subscribers to pledge their future PF contribution to buy low-cost houses and to reduce administrative charges from 0.85 per cent to 0.65 per cent of basic wages,” sources added.

These two proposals for housing and reduction of administrative charges paid by employers were on agenda for discussion at the last meeting of CBT held on September 16. EPFO had reduced the administrative charges from 1.10 per cent of basic wages to 0.85 percent in March this year. The further reduction to 0.65 per cent will help companies save around Rs 2,000 crore annually.

EPFO apex decision-making body, the CBT may also consider the report of the expert committee on housing facility for the subscribers.

The committee has unanimously recommended a scheme to facilitate subscribers to buy houses where they will get an advance from their PF accumulation and will be allowed to pledge their future PF contribution as EMI payment.

Under the proposed scheme, there will be tripartite agreement with the member, bank/housing agency and EPFO for pledging future PF contributions as EMI payment.

The panel suggested that under the scheme, the subscribers will purchase a dwelling unit with loans from bank or housing finance companies and hypothecation of property in favour of the latter.

It is suggested that the benefits under the schemes of the Ministry of Housing and Urban Poverty Alleviation can also be extended to the beneficiaries of the scheme.

However, the panel has suggested this scheme for low-income formal sector workers who are EPFO subscribers and could not buy a house during their entire service period.

Related topics: Bonus Act Amendment, UAN made mandatory.

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