New interest rate will be applicable for EPF withdrawals claims
The government has approved 8.65% interest rate on employees provident fund or EPF for 2018-19, which will now soon be credited into the accounts of over 6 crore subscribers of retirement fund body EPFO, Press Trust of India reported, citing sources. The EPFO has been settling EPF withdrawal claims at 8.55%, the interest rate approved for 2017-18. Now, the EPFO will settle accounts on a higher rate of 8.65% for 2018-19, says the report.
Ministry of Labour and Employment has notified 8.65% rate of interest on EPF deposits for its subscribers (over 6 crore). Now, the interest would be credited into accounts of subscribers and claims would be settled at this rate,” PTI reported, citing a person familiar with the development.
In February this year, the Central Board of Trustees – the top decision-making body of EPFO – had approved 8.65% interest rate for 2018-19. The labour ministry notifies the EPF interest rate after the finance ministry’s approval and then the EPFO gives directions to its over 136 field offices to credit the rate of interest into subscribers’ account and settle their claims at the notified rates.
In February, the EPFO, headed by the labour minister, had decided to raise the interest rate on EPF to 8.65% for 2018-19, the first increase in the past three years.
For 2017-18, EPFO paid an interest rate of 8.55% and and for 2016-17, 8.65%.
Last month, EPFO had approved a proposal to restore commutation, or advance part-withdrawal, under the Employees’ Pension Scheme, providing relief to 6.3 lakh pensioners. The move would benefit the pensioners who had opted for commutation and got a lump-sum amount at the time of retirement before 2009. The provision for commutation of pension was withdrawn by the EPFO in 2009.
Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the reduced amount would be given in lump sum. After the 15 years, the pensioners were entitled to get the full pension.