Employees’ Provident Fund Members Account – Rate of Interest at 8.15% for the year 2022 -2 023 – EPFO Web Circulation dated 24.07.2023

File No.INV-11/2/2021-INV

(Web Circulation)

कर्मचारी भविष्‍य निधि संगठन
EMPLOYEES’ PROVIDENT FUND ORGANISATION
श्रम एवं रोजगार मंत्रालय, भारत सरकार
MINISTRY OF LABOUR & EMPLOYMENT, GOVERNMENT OF INDIA
मुख्‍य कार्यालय / Head Office
भविषय निधि भवन, 14, भीकाएजी कामा प्‍लेस, नई दिल्‍ली-110066
Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place, New Delhi – 110066

No. INV-11/2/2021- INV/2766

24 JUL 2023

To,

All ACC(HQ)/ ACC- Incharge of Zonal Offices
All RPFC-I/ Officers-In-Charge, Regional offices.

Subject: Declaration of Rate of Interest for the Employees’ Provident Fund Members Account for the year 2022-23- regarding

Sir,

The Ministry of Labour and Employment, Government of India, has conveyed the approval of the Central Government under para 60(1) of Employees’ Provident Fund Scheme, 1952 to credit interest @ 8.15% for the year 2022-23 to the account of each member of the EPF Scheme as per the provisions under Para 60 of EPF Scheme, 1952.

2. You are accordingly, requested to issue necessary instructions to all concerned for crediting the said interest to the members’ accounts.

(Authority: Ministry of Labour and Employment letter no. R-11018/ 01/ 2023-SS-II dated 18.07.2023.)

Yours’ faithfully,

(MSKVV Satyanarayana)
Addl. Central P. F. Commissioner (Investment

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Ministry of Labour & Employment

The Central Board Trustees (CBT) EPF recommends 8.15 % rate of interest to EPF subscribers for FY2022-2023

Posted on: 28 MAR 2023

The 233rd meeting of Central Board of Trustees, EPF was held today in Delhi under the Chairmanship of Shri Bhupendra Yadav, Union Minister for Labour & Employment and Environment, Forest & Climate Change. The Vice-Chairmanship of Shri Rameshwar Teli, Union Minister of State for Labour & Employment, Petroleum & Natural Gas and Co-Vice-Chairpersonship of Ms. Arti Ahuja, Secretary Labour & Employment and the Member Secretary Smt. Neelam Shami Rao, Central P F Commissioner were also present during the meeting.

The Central Board recommended 8.15 % annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2022-23. The interest rate would be officially notified in the government gazette after approval of Ministry of Finance, following which EPFO would credit the rate of interest into its subscribers’ accounts.

The CBT recommended the amount balancing both the growth & surplus fund to have safeguards.The recommended rate of interest of 8.15% safeguards the surplus as well as guarantees increase income to members. In fact, the rate of interest at 8.15 % and the surplus of 663.91 Crores is higher than the last year.

The Board’s recommendation involves distribution of more than Rs. 90,000 crores in the members’ account on the total principal amount of about Rs 11 lakh crores which was Rs 77,424.84 crores and Rs 9.56 lakh crores respectively in the FY 2021-22. The total income recommended for being distributed is highest till date. The growth in income and the principal amount is respectively more than 16% and 15% as compared to last financial year 2021-22.

EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk. Considering the credit profile of the EPFO investment, the interest rate of EPFO is higher than other comparable investments avenues available for subscribers. EPFO has consistently followed a prudent and balanced approach towards investment, putting highest emphasis on the safety and preservation of principal with an approach of caution and growth.

EPFO being one of the largest social security organization has stayed true to its objective by maintaining and providing its subscribers with the high assured interest rate even during the periods of volatility in equity and capital markets. A blend of conservative yet progressive approach of investment followed by EPFO has made it a wise option for PF members.

PIB

Download EPFO fixes 8.15% interest rate on EPF for 2022-2023 PDF

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The financial, investment and audit committee of the EPFO board had proposed 8.95 per cent rate of return as “feasible” in its meeting held in January 2016.

The central board of trustees of the Employees’ Provident Fund Organisation (EPFO) on Tuesday recommended 8.80 per cent rate of return on retirement savings under its watch for 2015-16.

Although this is a notch higher than the 8.75 per cent offered by the EPFO to its subscribers at present, the announcement has left the trade unions disappointed as they complain that the financial and investment panel of the EPFO board had earlier recommended interest rate of 8.95 per cent.

“We have strongly protested the move to declare rate of interest at 8.80 per cent in the CBT meeting today. At 8.95 per cent, the rate declared by the financial and investment panel of the EPFO, it is left with a surplus of 91 crore. We have not agreed to it,” said Prabhakar Banasure, a member of financial, investment and audit committee of the EPFO who was present in the meeting held in Chennai.

Mr. Banasure said Union Labour Minister Bandaru Dattatreya, who chaired the Central Borad of Trustees meeting, said 8.80 per cent is an “interim” interest rate. “We demanded the Minister to wait for the audit of the 2015-16 balance sheet before declaring the interest rates. However, he didn’t agree,” he added.

The FIAC of the EPFO board had proposed 8.95 per cent rate of return as “feasible” in its meeting held last month.

The EPFO has estimated Rs. 34,844 crore as its income meant for distribution of interest to its 8.7 crore subscribers for 2015-16. This includes a surplus of Rs. 1,604 crore which accrued in 2015 to the EPFO’s income beyond the fund’s original estimates.

The FIAC had discussed that with increase in the interest rate to 8.95 per cent, the surplus available with the retirement body would come out to be Rs. 91.40 crore. At 8.80 per cent and 8.85 per cent, the surplus would be Rs. 673.85 crore and Rs. 479.70 crore, respectively, the FIAC had said.

Earlier, the labour ministry had proposed 8.90 per cent as rate of interest to the union labour ministry for taking in-principle approval of the finance ministry. However, sources said the finance ministry, which is looking to moderate the returns on small savings instruments, wanted the EPFO’s returns to fall in line.

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– However, a final decision on this would be taken at a meeting of the Central Board of Trustees (CBT), the apex decision-making body of the EPFO, tomorrow in Chennai.

The Employees’ Provident Fund Organisation (EPFO) is likely to retain the rate of interest at 8.75% for provident fund deposits for the current fiscal, sources in the labour ministry said.

EPFO has been paying 8.75% interest rate for the last two fiscals to its 5 crore organised sector subscribers. Retaining of the rate for the third year in a row might face resistance from the central trade unions, who are pressing for a 9% returns for the current fiscal.

However, a final decision on this would be taken at a meeting of the Central Board of Trustees (CBT), the apex decision-making body of the EPFO, tomorrow in Chennai. The CBT includes representatives from the government, employers and employees.

Sources said that the rates would most likely to be retained at the previous two years’ level considering the government’s proposal to bring down the rates of small savings with effect from April 1 to allow banks to reduce their lending rate in tandem with rate cuts by the Reserve Bank.

EPFO provides the rate of interest from its earnings on investment on formal sector workers’ fund without any assistance from the government. The income projection of the retirement fund body is upwards of R34,844 crore for the current fiscal. At this, EPFO would not have any problem to raise the rates to even 9% considering that it would still have R100-odd crore surplus.

Sources, however, said the finance ministry is not in agreement with the idea of raising the rates since it would have a lot of bearings on other savings schemes as well. The Finance Audit and Investment Committee of the EPFO had earlier recommended 8.95% rate of interest rate on PF deposits.

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