In a major development, Employees’ Provident Fund Organisation (EPFO) in a meeting held on Wednesday has taken a big decision pertaining to provident fund. EPFO in the meet decided the interest rates for FY19-20. As per the latest update, EPFO has decided an interest rate of 8.5% per annum on EPF for FY19-20. However, as of now EPFO will only offer 8.15% a annum, and remaining 0.35% will be offered in the month of December.
On Tuesday, EPFO had confirmed that it settled 94.41 lakh claims during pandemic since 1st April. 75% of COVID-19 advance and 79% of illness claims settled for PF subscribers earning monthly wages less than Rs 15,000. Amid, COVID-19 pandemic restrictions, EPFO has been able to settle a staggering 94.41 lakh claims thereby disbursing about Rs 35,445 crore to its members during the period of April-August, 2020. During this period, EPFO has settled around 32% more claims as compared to the corresponding period of last year (April-August, 2019) while the amount disbursed increased by around 13%.
Further, Ministry of Labour and Employment in a statement said, “To help its members tide over the liquidity needs during this crisis, EPFO fast-tracked settling of COVID-19 advances and illness-related claims. It introduced auto mode of settlement for these two categories of advances. Auto mode of settlement reduced the claim settlement cycle to just 3 days for most claims in these two categories against the statutory requirement to settle claims within 20 days. Notably, 55% of advance claims settled during April-August 2020 were related to the recently introduced Covid-19 advance while around 31% of advances settled during the period pertained to illness claims.”
The wage-wise analysis highlights that almost 75% of COVID-19 advances and roughly 79% of illness related claims were settled for PF subscribers belonging to wage slab of less than Rs.15,000. Timely availability of PF advances prevented many low wage earners from falling into debt, providing social security support to the weakest section of the workforce during these adverse times.
Partial withdrawal claims or advances under EPF scheme have more than doubled, with data reflecting about 212% growth for the period April-August 2020 as compared with April-August 2019.
With EPFO settling advance claims within 3 days, PF accumulations are now seen as liquid assets that can timely meet the need of the subscribers during crisis. Consequently, members have shown greater trust in EPFO by not opting for final withdrawal or closure of account instead of choosing to apply for PF advances to meet their financial needs.