The Retirement fund body Employees Provident Fund Organisation (EPFO) has announced an increase in the interest rate to 8.75%. Moreover, the following major decisions have been taken by the by the Central Board of Trustees (CBT) of the EPFO at its meeting held on Monday, 13th January 2014:
Increase in Interest Rates: The interest rate on provident fund (PF) deposits has been increased to 8.75% for 2013-14. This will benefit 50 million subscribers. The interest rate on PF deposits in the previous financial year was 8.50%. The EPFO's recommendations would now be vetted by the finance ministry. Once the ministry gives its concurrence to the decision, the interest would be credited into the accounts of subscribers.
Increase in EDLI coverage: The cover under the Employees' Deposit Linked Insurance (EDLI) Scheme has been increased by 20%, as an interim measure. Under this scheme, currently, the family of a worker can get a maximum sum assured of Rs. 1,30,000 in case of his/her demise during the service period. After the raise, the maximum amount would be Rs. 1,56,000.
Increase in minimum administrative charges: The minimum administrative charges for managing EPF Scheme and EDLI Scheme have been increased to Rs. 500 and Rs. 200 a month from Rs. 5 and Rs. 2, respectively. The charges for non-functional firms having no contributory members have also been increased to Rs. 75 and Rs. 25 per month, respectively, for the two schemes.
E-Return facility for Exempted PF trusts: EPFO has launched an electronic return facility for exempted establishments (private PF trusts). It will benefit 3,000 exempted establishments which are now required to file their monthly and annual paper returns. These establishments which are otherwise managing the provident fund trust on their own will now get the facility of electronically reporting about their work. This electronic return will replace the earlier monthly and annual paper returns filed by exempted establishments.
This is for your kind information, please.
In case you need any clarity or professional help in the matter, please feel free to contact the undersigned.
Vice President - Operations