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NEW DELHI: The Employees Provident Fund Organisation (EPFO) on Saturday proposed to lower the interest rate on retirement savings for its 6.4 crore subscribers from 8.5% to 8.1%, the lowest since 1977-78.
The payout, which will have to be confirmed by the finance ministry, is in line with the agency’s earnings and will leave it with a surplus of Rs 450 crore during the financial year. Under the rules, EPFO has to decide on the interest payment based on its earnings and cannot seek external support.
Compared to earnings of 8.5% on the corpus last year, this year’s earnings EPFO has estimated an income of Rs 76,768 crore, which translates into a return of 7.9%, labour minister Bhupendra Yadav said after a meeting of the EPFO in Guwahati.
“If invested in SBI, it will fetch you 5.45%. Similar instruments like PPF or others will earn 6.8% to 7.1% interest. That is why, based on the prevailing international situation and conditions in the equity market, investment has to be balanced with social security. We can’t take high risk instruments, (as) we are there to provide social security,” he said.
The payout, which will have to be confirmed by the finance ministry, is in line with the agency’s earnings and will leave it with a surplus of Rs 450 crore during the financial year. Under the rules, EPFO has to decide on the interest payment based on its earnings and cannot seek external support.
Compared to earnings of 8.5% on the corpus last year, this year’s earnings EPFO has estimated an income of Rs 76,768 crore, which translates into a return of 7.9%, labour minister Bhupendra Yadav said after a meeting of the EPFO in Guwahati.
“If invested in SBI, it will fetch you 5.45%. Similar instruments like PPF or others will earn 6.8% to 7.1% interest. That is why, based on the prevailing international situation and conditions in the equity market, investment has to be balanced with social security. We can’t take high risk instruments, (as) we are there to provide social security,” he said.
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