Surabhi
Returns on provident fund contributions are likely to remain close to the 8.25% interest rate announced for last fiscal with a downward revision of a few basis points likely.
The Central Board of Trustees of the Employees’ Provident Fund Organisation is set to meet on February 28 to discuss the interest rate on provident fund contributions for 2024-25.
According to sources familiar with the development, the interest rate may remain close to the current rate with a marginal decrease likely. “Given the EPFO’s current corpus and investments, there could be a marginal decrease and the interest rate may be around 8.2-8.25%,” said a person familiar with the development, noting that bond yields have fallen in the last one year and it is likely to continue going forward as well.
As per the EPFO’s Annual Report for 2023-24, it received contributions of Rs 2.26 lakh crore, registering a 6.54% growth on a year-on-year basis. Its total investments amounted to Rs 15.29 lakh crore as on March 31, 2024
For 2023-24, the EPFO had announced an interest rate of 8.25%, marginally higher than the 8.15% interest rate it had announced in 2022-23.
The CBT is the apex decision making body of the EPFO and is chaired by Union Labour Minister Mansukh Mandaviya.
The investment committee of the EPFO met last week while the Executive Committee of the EPFO held its meeting on February 26.
Apart from the interest rate hike, the CBT is also expected to review the progress of the implementation of pension of higher wages as well as the centralised IT enabled system that is expected to help the EPFO transition from decentralised databases to a centralised system, laying the foundation for enhanced performance.
A review of some of the investment instruments including the exposure and returns from the exchange traded funds is also expected to be undertaken.