EPFO Announces Interest Rate Hike on Provident Fund Deposits
Retirement fund body EPFO announced a hike in the interest rate on Provident Fund deposits to 8.75 percent for 2013-14, a decision that will benefit over 5 crore subscribers. The interest rate on PF deposits in the previous financial year was 8.5 percent. The decision to raise the 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 will now vet the EPFO's recommendations. Once the ministry gives its concurrence to the decision, the interest will be credited into the accounts of subscribers.
Increase in Employees' Deposit Linked Insurance Scheme
EPFO also announced a 20 percent increase in the 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 the 20 percent raise, the maximum amount will now be Rs 1,56,000.
Increase in Administrative Charges
CBT has also approved increasing the minimum administrative charges for managing the EPF Scheme, 1952, and the EDLI Scheme to Rs 500 and Rs 200 per month from the 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.
Retirement fund body EPFO announced a hike in the interest rate on Provident Fund deposits to 8.75 percent for 2013-14, a decision that will benefit over 5 crore subscribers. The interest rate on PF deposits in the previous financial year was 8.5 percent. The decision to raise the 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 will now vet the EPFO's recommendations. Once the ministry gives its concurrence to the decision, the interest will be credited into the accounts of subscribers.
Increase in Employees' Deposit Linked Insurance Scheme
EPFO also announced a 20 percent increase in the 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 the 20 percent raise, the maximum amount will now be Rs 1,56,000.
Increase in Administrative Charges
CBT has also approved increasing the minimum administrative charges for managing the EPF Scheme, 1952, and the EDLI Scheme to Rs 500 and Rs 200 per month from the 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.