EPFO to pay 8.5% interest for FY20 in two instalments, cites Covid impact

The Employees’ Provident Fund Organsation (EPFO) decided on Wednesday to credit history curiosity amount to formal sector workers for 2019-twenty in a staggered way, citing the coronavirus pandemic’s impression on its revenue.

The EPFO will credit history eight.15 for every cent to its subscribers for 2019-twenty for now: significantly reduce than eight.5 for every cent it experienced decided upon in March. “The remaining .35 for every cent will be credited in December soon after redemption of the EPFO’s fairness investments,” claimed a member of the central board of trustees (CBT) of the EPFO. The EPFO is staring at a shortfall of Rs 2,five hundred crore in 2019-twenty if it offers out the curiosity amount of eight.5 for every cent to its subscribers at one go, claimed the member requesting anonymity.

The conclusion was taken in the EPFO’s central board of trustees meeting chaired by labour and work minister Santosh Kumar Gangwar on Wednesday.

The curiosity amount of eight.5 for every cent was already a 7-yr minimal and the EPFO experienced credited returns of eight.sixty five for every cent to its subscribers in the prior fiscal yr.

If the EPFO is not able to credit history the remaining .35% of curiosity amount in December this yr, it will be the most affordable returns that the fund’s subscribers will get considering that 1977-78. The EPFO experienced provided an curiosity amount of eight for every cent in 1977-78.

ALSO Go through: Covid-19 selloff in March eats into EPFO fairness returns in FY20

The EPFO’s investments in the fairness marketplaces yielded damaging returns in 2019-twenty, official info offered in the CBT meeting showed. The investments accrued return of -eight.3 for every cent for the fiscal, down from fourteen.seven for every cent in the prior fiscal. The unparalleled selloff in March, triggered by the Covid-19 pandemic, has eaten into 2019-twenty fairness returns for virtually all buyers.

The EPFO designed an financial commitment of Rs 31,501 crore in trade-traded resources (ETFs) in 2019-twenty, compared to Rs 27,974 crore invested in the prior fiscal yr. The EPFO also received reduce returns on its investments in authorities securities.

The curiosity amount will be notified by the labour ministry soon after acquiring approval from the finance ministry.

The EPFO’s before projections experienced demonstrated that by agreeing to give an curiosity amount of eight.5 for every cent in March, it would have been still left with a surplus of about Rs seven-hundred crore.

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