Team News Riveting
New Delhi, September 9
The Employees’ Provident Fund Organisation (EPFO) had decided to credit interest rate for 2019-20 in instalments citing the impact of Covid-19.
The retirement fund body has decided to credit 8.15 per cent interest into the subscribers’ account first, while the remaining 0.35 per cent will be credited in December.
“There is no going back on 8.5 per cent rate for FY20, but the current situation has pushed us to go for two instalments,” said a central board trustee of the EPFO. The EPFO is staring at a shortfall of Rs 2,500 crore in 2019-20 if it gives out the interest rate of 8.5 per cent to its subscribers at one go, the member said.
The decision was taken in the EPFO’s central board of trustees meeting today that was chaired by labour and employment minister Santosh Kumar Gangwar.
The interest rate of 8.5 per cent was already a seven-year low and the EPFO had credited returns of 8.65 per cent to its subscribers in the previous financial year.
If the EPFO is unable to credit the remaining 0.35 per cent of interest rate in December this year, it will be the lowest returns that the fund’s subscribers will get since 1977-78. The EPFO had given an interest rate of 8 per cent in 1977-78.
The EPFO’s investments in the equity markets had given negative returns in 2019-20, the CBT meeting was told. The investment return was minus 8.3 per cent for the fiscal that was down from 14.7 per cent in the previous fiscal.
The EPFO made an investment of Rs 31,501 crore in exchange-traded funds (ETFs) in 2019-20, compared to Rs 27,974 crore invested in the previous fiscal year. The EPFO also got lower returns on its investments in government securities.
