EPF interest rate cut, at 4-decade low
New Delhi, March 12
The government today reduced the interest rate on Employees’ Provident Fund Organisation (EPFO) deposits to 8.1 per cent for 2021-22. The interest rate was 8.5 per cent during the last fiscal.
The lowest interest rate since 1977-78 on the retirement fund for organised sector employees was recommended by the Central Board of Trustees after its meeting in Guwahati under the chairmanship of Union Labour and Employment Minister Bhupendra Yadav.
The Union Finance Ministry needs to approve the recommendation before it is notified for implementation.
Sources said the lower interest rate was because of tepid earnings due to the pandemic. The EPFO had delayed payments for fiscal ’20 and finally paid the interest in two instalments. Provident fund savings are mandatory under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. At least 12 per cent of an employee’s basic salary is compulsorily deducted to be saved in provident fund. —
