Idle PF accounts to earn interest once again

The central board of trustees of the Employees' Provident Fund Organisation has decided to give the benefit of accrual of interest on inoperative accounts, reversing a decision taken in 2011 by the then UPA government.

This will benefit an estimated nine crore inoperative accounts of subscribers who have switched jobs. The EPFO has estimated that over Rs30,000 crore is lying idle in these inoperative accounts.

"We have taken a pro-worker decision to give interest on inoperative accounts with effect from April 1, 2016," labour minister Bandaru Dattatreya said on 29 March after the 212th meeting of the board of trustees.

Inoperative EPF accounts are those where there has been no contribution from either the employee or the employer for 36 months.

The decision not to give interest on these accounts was taken to persuade employees to withdraw their money or merge it with active accounts.

Besides, the board has given an in-principle approval to the restructuring of the organisation as recommended by the sub-committee set up for the purpose.

"A small committee under the CPFC (Central Provident Fund Commissioner) will address all anomalies in a month's time, after which the exercise will start," Dattatreya said.