 "Returns on your provident fund deposits remain same as EPFO keeps interest rate at 8.25%")
The Employees’ Provident Fund Organisation (EPFO) Friday recommended retaining the 8.25% interest rate for its subscribers for 2024-25 (Apr-Mar), the labour ministry said on Friday.
The interest rate would be officially notified by the Government of India, following which EPFO would credit the rate of interest into the subscribers’ accounts.
The ministry said in a release that the central board also decided to enhance the insurance benefits under the Employees’ Deposit Linked Insurance (EDLI) scheme at the 237th meeting of the Central Board of Trustees of the EPFO on Friday.
“CBT (Central Board of Trustees) recommended 8.25 per cent annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2024-25,” it said.
The ministry informed that the interest rate would be officially notified by the government, following which EPFO would credit the rate of interest to the subscribers’ accounts.
According to the statement, the decision on interest rate was taken at the 237th meeting of the CBT of the EPFO chaired by the Union Minister for Labour & Employment Mansukh Mandaviya in New Delhi on Friday.
The ministry stated that compared to many other fixed-income instruments, the Employees’ Provident Fund (EPF) offers relatively high and stable returns, ensuring steady growth of savings.
Impact Shorts
More ShortsThe interest earned on EPF deposits is tax-free (up to a specified limit), making it a highly attractive investment option for salaried individuals.
The CBT, under the chairmanship of Mandaviya, took a series of decisions including enhancement of insurance benefits under Employees’ Deposit-Linked Insurance (EDLI) Scheme.
Following the actuarial valuation of the EDLI scheme, the Board approved key modifications in scheme to provide greater financial security and support to the family of members.
The ministry stated that the CBT approved the introduction of a minimum benefit for death within one year of service.
A minimum life insurance benefit of Rs 50,000 will be provided in cases where an EPF member dies without completing one year of continuous service, it informed.
This amendment is expected to result in higher benefits for more than 5,000 cases of deaths in service, every year, it stated.
The CBT also approved benefits for members who die while in service after a non-contributory period. Previously, the EDLI benefits were being denied in such cases considering these as death away from service.
Now, if a member passes away within six months of their last contribution received, the EDLI benefit will be admissible, provided the member’s name is not stuck off from rolls, it stated.
The modification is estimated to result in benefits for more than 14,000 cases of such death cases every year.
The CBT also approved the proposal for consideration of service continuity under the scheme.
Earlier, a gap of even one or two days (such as weekends or holidays) between employment in two establishments led to the denial of minimum EDLI benefits of Rs 2.5 lakh and maximum of Rs 7 lakh, as the condition of continuous service of one year was not met.
Under the new modifications, a gap of up to two months between two spells of employment will now be considered as continuous service, ensuring eligibility for higher quantum EDLI benefits.
This change is expected to benefit more than 1,000 cases of deaths in service, every year, it noted.
The modifications are estimated to result in higher benefits under EDLI in more than 20,000 cases of death in service every year.
On the Supreme Court Judgment on Pension on Higher Wages (PoHW), the CBT is apprised that various steps have been taken by the EPFO to facilitate members/pensioners/employers.
The CBT was also apprised that EPFO is working on a mission mode and 72 per cent of the applications have been processed.
The Board also approved the Revised Estimates for the year 2024-25 and Budget Estimates for the year 2025-26 for EPFO and the schemes administered by it.
General Secretary, Trade Union Coordination Committee S P Tiwari said the yearly account report was submitted to the CBT, in which the interest earned for this year was estimated at Rs 5,311 crore. “Hence the same rate was resolved considering the growth and surplus which was available,” he added.
The TUCC demanded an increase in the rate of interest to 8.30 per cent, Tiwari, an EPFO trustee, said.
With inputs from agencies
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