New Interest Rate of 8.95%
The proposal of 8.95% interest rate on Provident Fund retirement savings was sent by the F&I Panel of the EPFO under its estimate for financial year 2015-16. Last year, the interest rate of 8.75% for 2014-15 was provided by EPFO.
As per the latest proposal of interest rate increment, the Union Finance Ministry department may put resist the same to reduce the interest rate. For the period of 2015-16, the estimation made by EPFO was INR 34,845 Crore and the purpose of this amount was to distribute interest towards around 8.8 crore PF subscribers. This amount includes a surplus of INR 1604 Crore, accrued by EPFO last year.
If the PF Interest Rate 2015-16 will be increased to 8.95%, the surplus amount will be INR 92 crore (approx) for the retirement body as per latest documentary analysis. But there is a chance of deficit INR 103 Crore (approx) at 9% interest rate.
According to latest calculation, the surplus amount would be earned by EPFO department INR 674 crore (approx) at a rate of interest 8.80% and INR 480 Crore (approx) at 8.85%.The Govt. FIAC (Finance Investment Audit Committee) also recommended keeping some surplus amount on hand for meeting the clearance of any pending debt instrument in the last few years. Before, declaration of the rate of return of Debt instrument, the return rate from equity instruments shouldn’t be avoided.
In this financial year, for the first time, the EPF savings amount is deployed in the markets of equity. The equity allocation has been started at 5% by EPFO Department cautiously since August 2015 after the notification by the Finance ministry for 15% equity investments from fresh accretion of non-government retirement funds.
The proposed interest rate instrument can be considered as the highest amount in last 5 years, may get resistance from the Finance Ministry, which is seeking to lower the interest rates on small savings amount. Currently, rates of interest 8.75% is being provided by EPFO. The proposed new interest rate of 8.95% might increase more investment fund in EPFO other than alternative Public Provident Fund (PPF), General Provident Fund (GPF), National Savings Certificates (NSC) and Special Deposit Scheme which offer lower interest rate.
In order to fix the interest rate in February, Mr. Bandaru Dattatreya, the Union Labor Minister would like to take a final call.
As per latest statement by a member of FIAC after Monday meeting, “8.95% interest rate for 2015-16 is being recommended by FIAC (Finance Investment Audit Committee) for EPFO board and which will be implemented from next month”.
I turned 58 2 years back. How can i get the pension and what amount would be paid.
What is your PF No?
I RETIRED ON JULY 2015 , AND NOT WITHDRAWL MY PF , UPTO HOW MUCH TIME THE INTEREST WILL BE PAID TO ME AND WHAT RATE
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