The Employees Provident Fund (EPF) is a retirement savings scheme available to all salaried employees in India. Administered by the Employees’ Provident Fund Organisation (EPFO), one of the social security organisations, the scheme entails both employers and employees contributing 12 per cent of the employee’s basic salary towards the fund. EPFO provides pension, insurance, and lump-sum payments upon retirement.
EPF For Financial Security
The EPF involves a fixed deduction from an employee’s monthly salary, and also contributed by both the employer to the EPF account. This account serves as a financial resource, allowing individuals to leverage their EPF savings for loans or withdraw the accumulated amount post-retirement to meet various expenses.
Read More: How To Check PF Balance Without UAN
Interest Rate and Investment Strategy
The Central Board of Trustees (CBT) of the EPFO is likely to recommend an interest rate of 8 per cent for the financial year 2023-24, ET reported citing its sources. This comes after the EPFO credited 8.15 per cent interest in FY23 and 8.10 per cent in FY22.
According ET report, EPFO might also seek approval to increase investment in stocks from the current 10 per cent to 15 per cent. This move can boost returns on investments, a decision likely to be met with approval during the upcoming CBT meeting.
Read More: Public Provident Fund: How to revive a discontinued PPF account
Lowering Interest Rates Trends On PF
Over the Years Government constantly reducing the interest rates. In FY22 government reduced the interest rate from 8.50 to 8.10. While in 2020 the government cut the interest rate by 0.15 per cent from 8.65 to 8.50. Take look at the interest rates trends on PF in last 10 years.
| Financial Year | Interest Rate on PF |
| 2022-23 | 8.15 |
| 2021-22 | 8.10 |
| 2020-21 | 8.50 |
| 2019-20 | 8.50 |
| 2018-19 | 8.65 |
| 2017-18 | 8.55 |
| 2016-17 | 8.65 |
| 2015-16 | 8.80 |
| 2014-15 | 8.75 |
| 2013-14 | 8.75 |
Considerations and Government’s Perspective
“This being an election year, the government will ensure a sustainable rate of return on provident fund (PF) deposits which is also at par with the existing rates to avoid any backlash.” EPFO board member said ET quoted.
Read More: Increase In Employees’ Pension Fund Pension
Meeting Agenda: Pensions, Budgetary Estimates, And Compliance Issues
The agenda for the 235th meeting of the CBT, scheduled for February 10, likley to discuss on updates of pensions, budgetary estimates, and compliance issues. While interest rates and equity investments are not explicitly mentioned, there is anticipation that these matters will be presented before the CBT.
