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Friday, February 05, 2016

Interest on provident fund deposits likely to increase to 9% on February 16

Retirement fund body Employees' Provident Fund Organisation​ (EPFO) may announce 9% interest rate on provident fund (PF) deposits for 2015-16 in its trustees' meet on February 16, higher than 8.75% provided in previous two financial years
Retirement fund body Employees' Provident Fund Organisation​ (EPFO) may announce 9% interest rate on provident fund (PF) deposits for 2015-16 in its trustees' meet on February 16, higher than 8.75% provided in previous two financial years.
"The 211th meeting of the Central Board of Trustees (CBT) has been scheduled to be held on February 16, 2016 in Chennai," an EPFO circular stated.

According to the circular, the issues to be placed for consideration of the CBT include rate of interest to be credited to EPFO members' account for the year 2015-16, cadre restructuring of the body and annual accounts in respect of EPF Scheme 1952, EPS 1995 and EDLI Scheme 1976 for the year 2014-15.

Earlier, the EPFO's advisory body had recommended 8.95% rate of interest for the current fiscal which is higher than 8.75 per cent provided in 2013-14 and 2015-16.

According to EPFO income projections worked out in September, providing 9% interest on PF will result in a deficit of Rs 100 crore.
9% rate of interest on PF deposits when EPFO will work out the latest estimates. FAIC can change its recommendation in the next meeting and suggest 9% interest rate for 2015-16," a CBT and FAIC member P J Banasure had said.

The proposal has to be endorsed by the Central Board of Trustees (CBT) before the Finance Ministry notifies it.

However, there has been indications from the Finance Ministry that it will slash interest rate on small savings like public provident fund in view of the rate cut by Reserve Bank of India.

The EPFO provides rate of interest from the earning on investments of formal sector workers' funds without any assistance from the government

Thus, the workers' representative are of the view that if there is no deficit on providing 9 per cent rate of interest for the current fiscal, then government should not have any issue with it.

Necessary Circular is appended below
CBT Meeting Circular in regards to Interest Rate 2015-2016

@Courtesy http://www.dnaindia.com/money