At its meeting in Guwahati on Saturday, the PF body’s Central Board of Trustees (CBT), chaired by Labour and Employment Minister Bhupender Yadav, is said to have suggested an 8.1 percent rate for the year. The return on retirement savings held by the Employees’ Provident Fund Organisation (EPFO) is expected to drop to 8.1 percent in 2021-22, down 0.4 percent from the 8.5 percent rate credited to EPF members’ accounts in the previous two years and the lowest rate in several years.
With a corpus of almost 16 lakh crore, the EPFO is the country’s largest retirement fund and the second largest non-banking financial institution.
PF rate reduces
Before it is added to the balance of EPF account holders, the proposed rate must be approved by the Finance Ministry, and annual returns are normally deposited to PF accounts with a significant time lag after the year in question has ended. The decision to reduce the EPF rate from 8.65 percent in 2018-19 to 8.5 percent in 2019-20 may be criticised by central trade unions, who opposed the decision to reduce the rate from 8.65 percent in 2018-19 to 8.5 percent in 2019-20.
As of March 31, 2020, the EPFO had 24.77 crore members having EPF accounts, with 14.36 crore receiving Unique Account Numbers (UANs). In 2019-20, about five crore members are active contributors, with new contributions made to their EPF accounts.