Good news: Govt ratifies 8.65 per cent interest on EPF for 2018-19

Good news: Govt ratifies 8.65 per cent interest on EPF for 2018-19

The finance ministry has approved 8.65% rate of interest on Employees’ Provident Fund (EPF) for 2018-19 as decided by retirement fund body EPFO, benefitting more than 6 crore formal sector workers. “The Department of Financial Services (DFS), a wing of the finance ministry, has given its concurrence to the Employees Provident Fund Organisation’s (EPFO) decision to provide 8.65% rate of interest for 2018-19 to its subscribers,” a source privy to the development said.

“The DFS has approved the proposal subject to fulfilment of certain conditions related to efficient management of the retirement fund,” the source said. In February, the EPFO’s apex decision making body, Central Board of Trustees, headed by labour minister Santosh Gangwar, had decided to raise the interest rate on the EPF to 8.65% for 2018-19, which was the first increase in the last three years.

The interest rate on EPF was hiked to 8.65% for the last fiscal from 8.55% provided in 2017-18. After the finance ministry’s concurrence, the income tax department and the labour ministry would notify the rate of interest for 2018-19. Thereafter, the EPFO would give directions to its over 120 field offices to credit the rate of interest into subscribers’ account and settle their claims accordingly.

According to EPFO estimates, there would be a surplus of `151.67 crore after providing 8.65% rate of interest for 2018-19. There would have been a deficit of `158 crore on providing 8.7% interest in EPF for the last fiscal. The EPFO had provided a five-year-low interest rate of 8.55% to its subscribers for 2017-18.