PF subscribers to get 9.5 per cent interest in 2010-11

15 Feb 2011

The central board of trustees of Employees Provident Fund Organisations (EPFO) which met in New Delhi under the chairmanship of Mallikarjun Kharge, minister for labour and employment has recommended a one percentage point increase in PF interest rate to 9.5 per cent for 2010-11.

This would help around 47.1 million EPFO subscribers get 1 per cent more in interest on their deposits for the financial year 2010-11.

Speaking to reporters on the sidelines of the EPFO board meeting, Kharge expressed the hope that the finance ministry will shortly give its concurrence to the proposal.

"I hope that after we answered all clarifications, they (finance ministry) will approve it (9.5 per cent interest rate for 2010-11)," he said.

He said the central board of trustees recommended the hike in interest rate and that the labour ministry has sent a letter reiterating that the calculation made were correct, and that since no government money was involved, the FPFO has certified that there will be no over-withdrawal from the Interest Suspense Account (ISA).

The board, which also deliberated on the investment pattern to be followed by EPFO in view of the recent letter from the ministry of finance, decided to act with proper prudence and responsibility to ensure that the capital invested by the members was safe.

"The members reiterated that safety of capital was more important than return on capital and therefore decided to continue with the present pattern of investment.'

The board also approved the amendments to be made in the EPF Scheme, 1952, Employees Pension Scheme, 1995 and the EDLI Scheme, 1976 to enable filing of mandatory returns by the employers in electronic form since EPFO has provided for uploading facility in its computer system. This would improve the services and compliance functions in EPF offices.