‘EPFO won’t revise rate downward’

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New Delhi: Union labour ministry clarified that the Employee Provident Fund Organisation (EPFO) will not revise its interim interest rate of 8.8% downward for the current financial y ear .
Labour minister Bandaru Dattatreya said, “We will not revise it (interim interest rate) downwards. The revision will be keeping in view the economic trend in the country, interest rates of various schemes as well as the 7th Pay Commission.”
When asked about the interim announcement, the minister said the prevailing situations need to be analysed and after that the Central Board of Trustees (CBT) will again meet in the future to decide the interest rate.
The minister said the trade union had demanded an interest rate of 9%, but paying at that rate would have left the retirement fund body with a deficit of Rs 102 crore.
The projected income of EPFO with a subscriber base of 4 crore is Rs 34,844 crore, he added.
This includes a surplus of Rs. 1,604 crore which accrued in 2015 to the EPFO’s income beyond the fund’s original estimates.
EPFO’s advisory body Finance Advisory and Investment Committee (FAIC) had recommended that 8.95% rate of interest on PF deposits for 2015-16 was feasible as it would leave a surplus of Rs 91 crore.