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Retirement fund body <keyword id="6372438" type="General" weightage="100" keywordseo="epfo" source="Orion">EPFO</keyword> is likely to approve this month a proposal to enhance its investments in equites to up to 20 per cent of the investible deposits from the current limit of 15 per cent. The proposal is expected to be considered and approved during the EPFO trustees' meeting scheduled to be held on July 29 and 30, according to a source. At present, EPFO can investment 5 to 15 per cent of the investible deposits in equity or equity-related schemes. The proposal to revise the limit to 20 per cent has been vetted and approved by the Employees' Provident Fund Organisation's (EPFO) advisory body Finance Audit and Investment Committee (FAIC). The recommendation of FAIC will be placed before the EPFO apex decision making body -- <keyword id="225704" type="General" weightage="50" keywordseo="central-board-of-trustees" source="Orion">Central Board of Trustees</keyword> (<keyword id="207775" type="General" weightage="50" keywordseo="cbt" source="Orion">CBT</keyword>) -- for consideration and approval. "The Central Board of Trustees (CBT) headed by Union Labour Minister is likely to approve the recommendation of the FAIC for increasing the investment in equity and equity related scheme to 5-20 per cent from existing 5-15 per cent," the source said. In a written reply to Lok Sabha on Monday, Minister of State for Labour and Employment Rameshwar Teli said, "FIAC, a sub-committee of CBT, <keyword id="45027" type="General" weightage="50" keywordseo="epf" source="Orion">EPF</keyword>, has recommended for the proposal to increase investment in equity and related investments in category IV of the Pattern of Investment from 5-15 per cent to 5-20 per cent for consideration of CBT, EPF." EPFO had started investing in Exchange Traded Funds (ETFs) in August 2015, putting 5 per cent of its investible deposits in stock-linked products. It was raised to 15 per cent for the current fiscal. Trade unions have been opposing any investment in stock markets by EPFO as these are not backed by government guarantee. In the written reply, Teli also said the notional return on EPFO equity-related investments rose 16.27 per cent in 2021-22 from 14.67 per cent in 2020-21. The reply also showed that the notional rate of return on equity related investment of the the EPFO was in negative at (-) 8.29 per cent in 2019-20 due to the impact of COVID-19. In 2021-22, the minister said EPFO settled 2,88,15,498 claims for withdrawal of Rs 1,04,959.18 crore by the subscribers. EPFO had settled 2,33,90,550 claims for withdrawal of Rs 91,187.54 crore in 2020-21. The withdrawal amount was Rs 70,202.34 crore in 2019-20 under 1,28,77,354 claims settled by the EPFO. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/rbi-seeks-a-crypto-ban-but-it-needs-global-collaboration-says-nirmala-sitharaman/articleshow/92954958.cms">RBI seeks a crypto ban but it needs global collaboration, says Nirmala Sitharaman</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/nifty-50-remains-the-top-performer-in-asia-despite-tussle-between-bulls-and-bears/articleshow/92952677.cms">Nifty 50 remains the top performer in Asia despite tussle between bulls and bears</a>

Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

<ul><li>EPFO on Wednesday decided to provide an 8.5% rate of interest on employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">provident fund</keyword> (EPF) for 2019-20 as committed earlier but in two tranches.</li><li>Business Insider spoke to experts to understand the impact of this move. </li><li><a href="https://www.businessinsider.in/">Check the latest news and updates on Business Insider. </a></li></ul> Retirement fund body EPFO on Wednesday decided to provide an 8.5% rate of interest on employees' provident fund (EPF) for 2019-20 as committed earlier but in two installments. According <a href="https://www.firstpost.com/business/epfo-to-pay-8-5-interest-for-fy20-in-two-instalments-cites-covids-impact-on-income-8800771.html">to a PTI source, </a>the EPFO will provide an 8.15% interest on EPF soon, and the remaining 0.35% rate would be credited into the subscribers' account by December 31, after the proposed liquidation of ETFs. "In view of exceptional circumstances arising out of COVID-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate of 8.50% to the Central Government,” <a href="https://www.firstpost.com/business/epfo-to-pay-8-5-interest-for-fy20-in-two-instalments-cites-covids-impact-on-income-8800771.html">the EPFO statement read. </a> Business Insider spoke to experts to understand the implications of the proposal. "In my opinion, there is no need to panic; the interest rate tranches of 8.15% and 0.35% is yet to be approved by the finance ministry and more so since the government has already declared the source of balance interest payment, which is 0.35%, from exchange-traded funds," Manjula Muthukrishnan, Managing Director - India, Avalara Technologies Pvt. Ltd. said. She further added, "We trust that the authorities have thought through the unique situation with back up plans. Subscribers should also note that the credit of interest in multiple instalments affects only to those subscribers who would be withdrawing the amounts soon and not applicable to all." Chetan Yadav, Chief People Officer, Tally Solutions, believes that since EPFO is a longer-term account, the proposal might not affect the cash in hand. “It is fine even if it is paid in instalments. Had COVID-19 not happened, EPFO would have come out with a lower interest rate. The fact that they’re accommodating with the situation is positive news,” Yadav told Business Insider. However, Diva Sharma thinks otherwise. According to him, the proposal is only going to make EPFO investors anxious. “EPFO investors and trade unions were already unhappy with the earlier decision to reduce the interest rate from 8.65% in 2018-19 to 8.50% in 2019-20. This news brings in further apprehension in the mind of EPFO investors on its ability to ensure investment returns on the corpus for paying 8.5% interest in the coming years as the yield from debt instruments are falling and equity markets are highly volatile,” says Divam Sharma, Co-founder, Green Portfolio. Sharma said EPFO doesn’t have the cash to pay its subscribers as their ETF investments (usually 85% in Debt instruments and 15% in Equity instruments) have shown negative returns in the last five years. EPFO was also forced to sell some of their Equity ETFs to raise cash for paying the balance 0.35% interest (from the proposed 8.5% for 2019-20). Apart from the shortage of cash, EPFO is yet to clarify a range of issues. “Questions that still remain unanswered are (a) Employees who withdrew their EPF on account of losing their jobs in the exceptional situation of the Covid-19 Pandemic, would they still be eligible for this interest? (b) If an employee has withdrawn his EPF partially, what would be the base on which interest will be calculated for FY 19-20? Also going forward for the next FY 20-21 what would be the base on which interest would be calculated?” Smita Goel, Partner, Taxation, Algo Legal said. On the other hand if EPFO decides to pay the interest in one go, as media reports suggest, EPFO will face an income shortfall of roughly ₹2,500 crore, according to Manjula Muthukrishnan, Managing Director - India, Avalara Technologies Pvt. Ltd. SEE ALSO: <a href="https://www.businessinsider.in/science/health/news/sii-pauses-oxfords-covid-19-vaccine-human-trials-following-show-cause-notice/articleshow/78036449.cms">Oxford COVID-19 vaccine: SII pauses trials in India following show-cause notice</a> <a href="https://www.businessinsider.in/business/startups/news/zomato-gets-over-100-million-from-tiger-global-valuation-could-hit-3-4-billion/articleshow/78036376.cms">Zomato gets over $100 million from Tiger Global – valuation could hit $3.4 billion</a>

EPFO defers one part of 8.5% interest payment due to COVID-19. Here’s what experts have to say about it

<ul><li><keyword id="6372438" type="General" weightage="20" keywordseo="epfo" source="Orion">EPFO</keyword> has reduced interest rates to the lowest in more than 40 years for the current financial year.</li><li>The government body has slashed interest rates to 8.1% from 8.5% in the previous fiscal year.</li><li>Despite EPFO’s interest rates being the lowest in its history in decades, it is higher compared to many other <keyword id="1791040" type="General" weightage="20" keywordseo="government-saving-schemes" source="Orion">government saving schemes</keyword> currently. </li></ul>The popular retirement saving scheme followed by many corporations for its employees has slashed its interest rates to a 40-year low amid such a challenging environment. On Saturday, the Employees' Provident Fund Organisation’s (EPFO) announced that it has recommended to reduce the interest rate of the retirement fund to 8.1% from 8.5% last year. The rate will now be approved by the Finance Ministry. While this is reportedly the lowest interest rate by EPFO since 1977-78, it still offers the highest returns than many other government saving schemes and bank deposits. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Saving instruments </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% interest rate </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Employees Provident Fund </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Public Provident Fund Scheme </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Senior citizen savings scheme </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sukanya Samriddhi Scheme </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Post Office time deposit (5 year) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">National Saving Certificate </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.8% </td></tr></tbody></table>Source: Department of Posts Ministry, Ministry of Communications Employees’ Provident Fund is a government retirement fund mandatory for employees earning up to ₹15,000 a month in firms with over 20 workers. Here the employee and the employer contribute to the EPF scheme on a monthly basis in equal proportions of 12% of the basic salary and dearness allowance. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Fiscal year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">EPF interest rate </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY16 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.80% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY17 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.65% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY18 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.55% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY19 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.65% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.50% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.50% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.10% </td></tr></tbody></table>K E Raghunathan, member of central board of trustees after announcing the reduction, reportedly said that it is understood that this is going to be the most unpredictable year because of the war and market conditions, among other things. Hence, the government body doesn’t want to overcommit with high rates. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/paytm-payments-bank-denies-report-claiming-it-leaked-data-to-chinese-firms/articleshow/90203210.cms">Paytm Payments Bank denies report claiming it leaked data to Chinese firms</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/ecommerce/news/four-years-later-sachin-bansal-is-still-battling-eight-lawsuits-from-his-flipkart-days/articleshow/90202495.cms">Four years later, Sachin Bansal is still battling eight lawsuits from his Flipkart days</a>

EPFO continues to give attractive interests rate compared to other government schemes

Around 8.2 lakh members of retirement fund body <keyword id="6372438" type="PERSON" weightage="20" keywordseo="epfo">EPFO</keyword> and private PF trusts have dipped into their savings and withdrew ₹3,243.17 crore to sustain in the lockdown imposed by the government to contain COVID-19. Earlier last month on March 28, the <keyword id="6423266" type="COMPANY" weightage="20" keywordseo="employees-provident-fund-organisation">Employees Provident Fund Organisation</keyword> (EPFO) had allowed formal sector workers under its ambit to withdraw a non-refundable advance from their <keyword id="415826" type="PERSON" weightage="20" keywordseo="retirement-savings">retirement savings</keyword> to deal with hardships due to lockdown. "EPFO under <keyword id="602690" type="COMPANY" weightage="20" keywordseo="Union-ministry-of-labour">Union Ministry of Labour</keyword> &amp; Employment, has settled a total of 12.91 lakhs claims, including 7.40 lakhs COVID-19 claims under Pradhan Mantri Garib Kalyan Yojana (PMGKY) package," a Labour Ministry statement said. Claims settlement involves disbursal of total amount of ₹4,684.52 crore which includes ₹2,367.65 crore COVID claims under the PMGKY package. The exempted private PF trusts have also risen to the occasion amidst the COVID-19 pandemic, the ministry said. As on April 27, 2020, ₹875.52 crore have been disbursed to 79,743 PF members as advance for COVID-19 by the exempted PF Trusts under this scheme, with 222 private sector establishments disbursing ₹338.23 crore to 54,641 beneficiaries, 76 public sector establishments disbursing ₹524.75 crores to 24,178 beneficiaries and 23 cooperative sector establishments disbursing ₹12.54 crores to 924 claimants, it said. Private PF trusts manage their employees' PF money and account themselves. They are exempted to file monthly PF return and thus also called exempted establishments. Tata Consultancy Services Mumbai, HCL Technologies Ltd. Gurugram and HDFC Bank Powai, Mumbai are the top three exempted establishments in the private sector, both in terms of number of claims settled and amount disbursed, it said. In public sector, ONGC Dehradun, Neyveli Lignite Corporation Neyveli and BHEL Trichy are the top three exempted establishments to have settled maximum number of COVID-19 advance claims; whereas, Neyveli Lignite Corporation Neyveli, ONGC Dehradun and Vishakhapatnam Steel Plant Vishakhapatnam are top three establishments in terms of amount disbursed to EPF members, it said. The provision for a special withdrawal from the EPF Scheme to fight COVID-19 pandemic is part of the PMGKY scheme announced by the government and an urgent notification on the matter was made to introduce a para 68 L (3) of the EPF Scheme on 28th March, 2020. Under this provision non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75 per cent of the amount standing to member's credit in the EPF account, whichever is less, is provided. Despite only one-third staff being able to work due to lockdown, EPFO is committed to serve its members during this difficult situation and EPFO offices are functional to help them during these testing times, it said. See also: <a href="https://www.businessinsider.in/india/news/a-checklist-of-steps-offices-should-take-as-they-reopen-after-lockdown-to-avoid-another-wave-of-covid-19-infections/articleshow/75421144.cms">A checklist of steps offices should take, as they reopen after lockdown, to avoid another wave of COVID-19 infections</a> <a href="https://www.businessinsider.in/india/news/covid-19-combat-retired-maha-teacher-gives-pension-to-cm-fund/articleshow/75123266.cms">COVID-19 combat: Retired Maha teacher gives pension to CM fund</a> <a href="https://www.businessinsider.in/business/corporates/news/reliance-industries-shareholders-may-get-dividend-payout-as-it-to-considers-rights-issue-at-april-30-board-meeting/articleshow/75422405.cms">Reliance Industries shareholders may get dividend payout as it to considers rights issue at April 30 board meeting</a>

Workers have withdrawn over ₹3,200 crore from their retirement savings to survive the Coronavirus lockdown

New Delhi, Mar 4 () Retirement fund body <keyword id="6372438" type="COMPANY" weightage="20" keywordseo="epfo">EPFO</keyword> on Thursday decided to retain 8.5 per cent rate of interest on provident fund deposits for the current financial year. EPFO has more than five crore active subscribers. The Employees' Provident Fund Organisation's (EPFO) apex decision-making body <keyword id="225704" type="COMPANY" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> decided to fix 8.5 per cent rate of interest for 2020-21 at its meeting in Srinagar on Thursday, sources said. There were speculations that the EPFO would lower interest on provident fund deposits for this fiscal (2020-21) from 8.5 per cent given in 2019-20 in view of more withdrawals and lesser contribution by members amid the coronavirus pandemic. In March last year, the EPFO had lowered interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent in 2018-19. The <keyword id="45027" type="COMPANY" weightage="20" keywordseo="EPF">EPF</keyword> (<keyword id="114591" type="COMPANY" weightage="20" keywordseo="Employees-Provident-Fund">Employees Provident Fund</keyword>) interest rate provided for 2019-20 was the lowest since 2012-13, when it was 8.5 per cent. The EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. The EPFO had provided 8.25 per cent rate of interest on provident fund in 2011-12. KKS RAM

EPFO retains 8.5% interest rate for 2020-21

The labour ministry has implemented retirement fund body <keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="epfo">EPFO</keyword>'s <keyword id="68581" type="PERSON" weightage="20" keywordseo="Decision">decision</keyword> to restore pension commutation under the Employees' Pension Scheme, a move that will benefit 6.3 lakh pensioners. Pension commutation refers to part-withdrawal of fund in advance by a subscriber, who then gets reduced pension amount for 15 years. With the ministry's latest decision, such pensioners would receive their full pension after completion of 15 years. On February 20, the ministry notified the decision of the <keyword id="351142" type="COMPANY" weightage="20" keywordseo="Employees-Provident-Fund-Organisation">Employees' Provident Fund Organisation</keyword> (EPFO) to restore pension of those who opted for commutation of their pension on or before September 25, 2008. In this regard, the Employees' Pension Scheme -- run by the EPFO -- has been amended. "The normal pension in respect of those members who availed the benefit of commutation of pension under the erstwhile paragraph 12A of this scheme, on or before the 25th day of September, 2008, shall be restored after completion of fifteen years from the date of such commutation," as per the notification. As many as 6.3 lakh pensioners would benefit from the decision. They had opted for commutation of their pension and got a lump sum at the time of retirement from their pension fund on or before September 25, 2008. The provision for pension commutation of pension was withdrawn by the EPFO. Now, the facility has been restored for all those who opted for it on or before September 25, 2008. Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the reduced amount was given in lump sum. After 15 years, pensioners were entitled to get the full pension. In August 2019, the EPFO's apex decision-making body -- <keyword id="5190387" type="COMPANY" weightage="20" keywordseo="Central-Board-of">Central Board of</keyword> Trustees headed by the labour minister -- approved the proposal to restore commutation of pension for 6.3 lakh pensioners who had opted for the benefit. An EPFO panel had recommended for amendment in EPS-95 (Employees' Pension Scheme 1995) for restoration of commuted value of pension to pensioners after 15 years of drawing commutation. Earlier, under EPS-95, members were allowed to commute one-third of their pension for 10 years, which was restored after 15 years. This facility is still available to certain categories of government employees.

6.3 lakh pensioners in India can now withdraw their funds in advance

<ul><li>The Employees' Provident Fund Organisation (<keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="epfo">EPFO</keyword>) may reportedly raise interest rates from the current level at 8.55%, but if not, the current interest rates will not be narrowed further. </li><li>According to A Mint report, the retirement body reportedly earned a surplus of nearly ₹6 billion at the existing interest rates in 2018. </li><li>On an average, the interest rate of Public Provident Fund and the National Savings Certificate in 2018 was recorded to be 7.7%, said the report.</li></ul>India’s Employees' Provident Fund Organisation (EPFO) may reportedly <a href="https://www.livemint.com/Money/Nvur6XFW8DxbSvo7FtrADJ/Bonanza-for-salaried-employees-EPF-interest-rate-hike-likel.html">raise interest rates</a> from the current level at 8.55%, move likely to benefit over 60 million employees across different industries. Though the rates are expected to go higher, but if not, the current interest rates will not be narrowed further, Mint reported citing a member of EPFO's central board of trustees. Even if the current interest rates follow, it will be a favourable decision for the salaried employees. The interest rates are floated by the EPFO in December every year. However, this year, it will be declared on 1 February because of the ongoing audit. On average, the interest rate of Public Provident Fund and the National Savings Certificate in 2018 was recorded to be 7.7%, said the report. The Indian government recently made amendments in its regulations covering its retirement schemes — including directives of making tax-free withdrawals available to employees under National Pension System (NPS) and boosting the incentives to around 50% for health workers. The new interest rates will likely be in check with such announcements. According to the report, EPFO, which manages savings of over ₹11 trillion, reportedly earned a surplus of nearly ₹6 billion at the existing interest rates in 2018. If required, EPFO may use its equity investments, which have an estimated return of around 12% annually. Presently, it has invested over ₹500 billion in stock market. See also: <a href="https://www.businessinsider.in/the-indian-government-has-reportedly-invested-just-19-of-its-fund-dedicated-to-boosting-startups/articleshow/67323307.cms">The Indian government has reportedly invested just 19% of its fund dedicated to boosting startups</a> <a href="https://www.businessinsider.in/the-indian-government-is-looking-at-policing-online-content-on-social-media-including-breaking-end-to-end-encryption-report/articleshow/67230131.cms">The Indian government is looking at policing online content on social media including breaking end-to-end encryption: Report</a> <a href="https://www.businessinsider.in/the-indian-government-may-roll-back-a-tax-on-angel-investments-that-is-said-to-be-hurting-the-countrys-startup-ecosystem/articleshow/67177981.cms">The Indian government may roll back a tax on angel investments that is said to be hurting the country’s startup ecosystem</a>

The Indian government may mandate higher interest rates on its retirement fund scheme: Report

New Delhi, Retirement fund body EPFO on Thursday started crediting 8.5% rate of interest on employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">provident fund</keyword> (EPF) for 2019-20 for its over six crore members, a senior official said. A large number of members of the <keyword id="6423266" type="COMPANY" weightage="20" keywordseo="employees-provident-fund-organisation">Employees Provident Fund Organisation</keyword> (EPFO) would be able to see their updated EPF accounts with credit of 8.5 per cent rate of interest for 2019-20, a senior official told . The official further informed that the <keyword id="126926" type="COMPANY" weightage="20" keywordseo="Labour-Ministry">labour ministry</keyword> has already sent the direction to credit the 8.5% interest on EPF for 2019-20 to the EPFO and the body has already started crediting interest into members account for the last fiscal. Labour Minster <keyword id="258830" type="PERSON" weightage="20" keywordseo="Santosh-Gangwar">Santosh Gangwar</keyword> said, "We had said that it would be our endeavour to provide 8.5% rate of interest on EPF for 2019-20. We have issued a notification to provide 8.5% rate of interest on EPF for 2019-20. We have also began the process to credit the said rate of interest into subscribers account." The minister also said that he has asked to ensure that all those members who are retiring on December 31, must get 8.5% rate of interest (for 2019-20). The process for capital gains for payment of 0.35% interest for 2019-20 has also been completed, he added. "It (8.5% interest) would comprise 8.15% from debt income and balance 0.35% (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020," he said. Earlier in the day, Gangwar had approved the 8.5% rate for last fiscal after receiving the finance ministry's concurrence. Thereafter the direction was sent to the EPFO for crediting the interest on EPF into the subscribers' accounts. In March this year, the EPFO's apex decision making body <keyword id="225704" type="COMPANY" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> headed by Gangwar had approved 8.5% interest rate on EPF for 2019-20. Earlier in September this year, the EPFO had decided to split 8.5% interest into two installments of 8.15% and 0.35% in its trustees meet headed by Gangwar. But later, the ministry decided to credit the entire 8.5% into subscribers' accounts in one go. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-tata-steel-vedanta-adani-green-tata-motors-maruti-mm-dhfl-v-mart-indian-bank-and-others/articleshow/80038635.cms">Top stocks to watch — Tata Steel, Vedanta, Adani Green, Tata Motors, Maruti, M&amp;M, DHFL, V-Mart, Indian Bank, and others</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-the-list-of-upcoming-new-mobiles-in-january-2021-with-expected-price/articleshow/80039794.cms">Upcoming smartphones in India in January 2021</a> <a href="https://www.businessinsider.in/international/news/ten-of-the-most-outrageous-predictions-for-2021-according-to-saxo-bank/slidelist/80040045.cms">From Amazon buying Cyprus to Germany bailing out France — here are ten of the most ‘outrageous’ predictions for 2021</a>

EPFO begins crediting 8.5% interest for six crore people — to reflect in EPF accounts from new year

New Delhi, May 15 () Retirement fund body EPFO has decided not to impose any penalty for delay in payment of employees' provident fund contributions by firms during the natiowide lockdown. Since the imposition of lockdown on March 25 by the government to contain the COVID-19 spread, businesses have been facing liquidity or cash crunch, leading to difficulties in paying their mandatory provident fund dues. "During the lockdown period we are not going to impose any damages (penalty). This is our pro stakeholder/businesses/employers attitude which we are following," Employees' Provident Fund Organisations (EPFO) Central Provident Fund Commissioner Sunil Barthwal said during a webinar organised by industry body PHDCCI on Friday. The EPFO has a provision of charging damages or penalty from the employers who are unable to deposit PF contributions as mandated under the EPF Scheme 1952. Employers are required to deposit dues on a month's salary by 15th of the next month. However, they get 10 days grace for payment after that. Earlier on April 30, the EPFO allowed employers to file monthly EPF returns without making simultaneous payment of dues, which gave a relief to about 6 lakh firms amid the lockdown. Under the scheme, employers are required to file employees provident fund returns and make payment of dues simultaneously. EPF returns have details about employees' and employers' contributions towards the social security scheme run by the EPFO. During the ongoing coronavirus-induced lockdown, businesses are not able to function normally and are facing liquidity issues or cash crunch to pay their statutory dues even though they are retaining the employees on their rolls, labour ministry had said in a statement on the decision. Barthwal also told the industry representatives during the webinar that the government's decision to cut employers and employees' PF contributions to 10 per cent each from the existing 12 per cent would be implemented in May month's salaries. "Soon notification is going to be out...May month salaries would be due in June. So we will apply it on the May month salaries," he said. Earlier this week, Finance Minister Nirmala Sitharaman had announced reduction of statutory provident fund contribution by both employers and employees to 10 per cent of basic wages from the existing 12 per cent for the next three months. The decision was taken to facilitate more take-home salary for employees and give relief to employers in payment of PF dues, resulting in a liquidity ease of Rs 6,750 crore. The decision is expected to benefit 4.3 crore employees and 6.5 lakh employers reeling under liquidity crunch due to COVID-19 lockdown. Without divulging details about type of claims and time period, Barthwal said as many as 23 lakh claims were settled with disbursal of Rs 8,000 crore. Earlier on March 28, the EPFO had allowed formal sector workers under its ambit to withdraw a non-refundable advance from their retirement savings to deal with hardships due to lockdown. Under this provision, non-refundable withdrawal to the extent of the basic wages and dearness allowances for three months or up to 75 per cent of the amount standing to member's credit in the EPF account, whichever is less, is provided. KKS MKJ

Lockdown: EPFO not charging penalty from cos for delay in payment of provident fund dues

New Delhi, Mar 26 () Retirement fund body EPFO on Thursday directed its 135 field offices to ensure payment of pension to 65 lakh beneficiaries by March 30 amid the coronavirus lockdown, according to an official statement. The Employees' Provident Fund Organisation (EPFO) makes payment of pension on the last working day of every month under the Employees' Pension Scheme, 1995 (EPS). The Central Provident Fund Commissioner (CPFC) has directed them to credit pension to the EPS beneficiaries' accounts by March 30, the statement said. Last week, the CPFC directed to process pension payments in all 135 offices of the EPFO in advance so that no inconvenience is caused to pensioners on account of nationwide lockdown for containing coronavirus outbreak. EPFO officers and staff completed the processing of pension payments in all 135 offices and provided pensioner-wise payment details for 65 lakh pensioners along with requisite cheques to all pension-disbursing banks. Link nodal branches of all pension-disbursing banks throughout India have been directed to ensure credit of pension in the accounts of pensioners by March 30. KKS HRS

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Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

PTI

EPFO defers one part of 8.5% interest payment due to COVID-19. Here’s what experts have to say about it

BI India Bureau

EPFO continues to give attractive interests rate compared to other government schemes

Bhakti Makwana