Finance ministry orders EPFO rate cut

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Employees’ Provident Fund Organization rate upward of 50 basis points, orders Union finance ministry, following the decision of 8.65 percent interest for its subscribers.

These union labor ministry’s recommendations are made as an effort to raise salary ceiling to make sure that the employees get the deserving benefits during retirement.

There were doubts raised about the tenability of 8.65 percent interest rate on pension fund of retired employees. Now, it has sought for one more rate cut as this needs to cater to the liability if the EPFO is unable to pay out of its own funds.

The labor ministry intends to escalate exposure to stock markets. This has justified the interest rate of 8.65 percent so far.

On 12th April, the EPFO trustee board will meet up. This is believed to approve proposal for investing about 15 percent of the EPFO fund in stock market from the 10 percent threshold set at present.