Ministry of Labour & Employment
228th meeting of CBT, EPF held at Srinagar, J&K
The Central Board recommends 8.50 % rate of interest to its subscribers for the year 2020-21
Posted On: 04 MAR 2021
The 228th meeting of Central Board of Trustees, EPF was held today in Srinagar, Jammu & Kashmir under the chairmanship of Shri Santosh Kumar Gangwar,Union Minister of State for Labour & Employment(Independent Charge),Vice-Chairmanship of Shri Apurva Chandra, Secretary(L&E) and the Member Secretary Shri Sunil Barthwal, Central P F Commissioner.
During the meeting, Chairman, CBT launched e-facility for the Principal Employers (PE), which would allow them to view PF compliance and remittance made by their contractors in monthly ECR. Using this facility, the up-front credit of PMRPY and ABRY scheme benefits, made into the PF accounts of contract employees claimed by contractors will also be visible to the PE. Through this facility PE can ensure that EPF contributions for all contract workers are remitted by their enrolled contractors.
Chairman, CBT launched another web facility for registering, processing & monitoring of complaints & optional inspection by regional offices, zonal offices & head office through a web-based portal. Earlier, under Inspection Scheme, 2014, permission of Head Office was required for optional inspections and complaints investigations. To fastrack this work in new functionality, the process has been decentralized and zonal offices have now been empowered to assess the requests of the regional offices. Each request is registered with a unique ID and tracking is possible. Inspection report, status of actions taken gets updated on dashboard for monitoring. The whole activity is done through a web-based portal in a transparent manner.
Chairman, CBT virtually inaugurated three new Regional Office buildings of EPFO at Raichur, Salem, Jamshedpur and annexe buildings for Zonal Office & Regional Office in Bengaluru.
Chairman, CBT released a booklet titled ‘Response to Covid’. The booklet is an effort to encapsulate the preparedness of EPFO to innovate and deliver uninterrupted services to its stakeholders through the difficult time of Covid-19 pandemic. Subsequently, Chairman CBT, released another booklet on operations of EPFO in J&K and Ladhak, capturing the efforts made by EPFO in extending social security schemes in these UTs.
The following key decisions were taken by Central Board, EPF:-
In the above meeting of CBT, representatives from the employers, employees and other senior officers of the Central Government and EPFO were also present.
The 228th meeting of Central Board of Trustees, EPF was held today in Srinagar, Jammu & Kashmir under the chairmanship of Shri Santosh Kumar Gangwar, Union Minister of State for Labour & Employment(Independent Charge),Vice-Chairmanship of Shri Apurva Chandra, Secretary(L&E) and the Member Secretary Shri Sunil Barthwal, Central P F Commissioner. The Central Board recommended 8.50% annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2020-21. The interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into the subscribers’ accounts.
Since FY 2014 EPFO has consistently generated returns not less than 8.50 percent. A high EPF interest rate along with compounding , makes a significant difference to gains of subscribers. This is despite the fact that EPFO has consistently followed a conservative approach towards investment, putting highest emphasis on the safety and preservation of principal first approach. Risk appetite of EPFO is very low, since it involves investing poor man’s retirement savings also.
EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk. Considering the high credit profile of the EPFO investment, the interest rate of EPFO is considerably higher than other comparable investments avenues available for subscribers.
During the period from 2015-16 EPFO prudently started investing in equity through exchange traded funds based on the NSE 50 and BSE 30 indices. The investment in equity assets started from 5 percent for FY 2015 and subsequently gone up to 15 percent of the incremental portfolio.
For FY 2021, EPFO decided to liquidate investment in and the interest rate recommended is a result of combined income from interest received from debt investment as well as income realized from equity investment. This has enabled EPFO to provide higher return to its subscribers and still allowing EPFO with healthy surplus to act as cushion for providing higher return in future also. There is no over-drawl on EPFO corpus due to this income distribution.
The assured fixed return approach of EPFO, announced by CBT every year along with the tax exemptions makes it an attractive choice for investors, providing them with strong social security in the form of provident fund, pension and insurance schemes.