Employees Provident Fund Organization
The Employees Provident Fund Organization is expected to reduce the interest rate on PF deposits slightly to between 8 and 8.20 percent for 2025-26 in its 239th Central Board of Trustees meeting to be held in the first week of March. At present this interest rate for 2024-25 is 8.25 percent. Its purpose is that there should not be too much pressure on EPFO funds.
However, sources related to this matter say that there is political pressure due to the elections to be held in West Bengal, Tamil Nadu, Assam, Kerala and Puducherry. In such a situation, EPFO can maintain the status quo by not making any change in the interest rate for the third consecutive year.
According to the ET report, all options are being discussed, but under the Vikas Bharat Employment Scheme, new subscribers are joining EPFO rapidly. In such a situation, the interest rate can be reduced slightly to make future payments to more people, so that EPFO remains with minimum financial buffer. After taking the decision in the CBT meeting, the interest rate will first get approval from the Finance Ministry. After this, it will be issued by the Labor and Employment Ministry through official notification. It is expected that this interest will be credited to the subscribers’ accounts by the middle of this year.
Decision will also be taken on wage limit
The Finance Investment and Audit Committee of EPFO will meet in the last week of February. In this meeting, the interest rate will be decided on the basis of the returns received from the investments made so far in the current financial year and then it will be placed before the CBT as a recommendation. Apart from this, the Board is also expected to consider increasing the salary limit from the current Rs 15,000 per month to Rs 25,000 per month to increase social security coverage under EPFO. However, the agenda of the CBT meeting has not been finalized yet.
In January, the Supreme Court had directed EPFO to take a decision on increasing the salary limit within four months. The court had said that due to rising salaries and inflation, a large number of workers have fallen out of the scope of mandatory PF coverage. It is noteworthy that the salary limit of Rs 15,000 has remained unchanged since 2014. During this period, the income of low and mid-skilled employees has increased, due to which they were left out of the mandatory coverage of EPFO. FIAC is an important sub-committee of the CBT, which is responsible for investment strategy and audit oversight.
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