Retirement fund body EPFO announced a hike in interest rate on Provident Fund deposits to 8.75 per cent for 2013-14, a decision that will benefit over 5 crore subscribers. The interest rate on PF deposits in the previous financial year was from 8.5 per cent. The decision to raise interest rate was taken by the Central Board of Trustees (CBT), the apex decision-making body of the Employees' Provident Fund Organisation (EPFO).
The Finance Ministry would now vet the EPFO’s recommendations.
Once the ministry gives its concurrence to the decision, the interest would be credited into the accounts of subscribers.
EPFO also announced a 20 per cent increase on Employees' Deposit Linked Insurance Scheme, 1976 as an interim measure.
Under this scheme, 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 20 per cent raise, the maximum amount would now be Rs 1,56,000.
CBT has also approved increasing minimum administrative charges for managing EPF Scheme, 1952 and EDLI Scheme to Rs 500 and Rs 200 per month from existing rate of Rs 5 and Rs 2, respectively. These charges for non-functional firms having no contributory members are also increased to Rs 75 and Rs 25 per month respectively for the two schemes. EPFO has a corpus of around Rs five lakh crore.