NEW DELHI : The central board of the Employee Provident Fund Organization (EPFO) said on Wednesday that it will pay the 8.5% interest to EPF subscribers for 2019-20 in two installments.
The pension fund body has decided to first credit an interest of 8.15% in the subscribers’ account, while the remaining 0.35% will be credited in December.
“There is no going back on the 8.5% rate for fiscal year 2020, but the current situation has pushed us to go for two installments. Some of the investments could not be cashed due to the bad market situation, hence this new formula, “said Virjesh Upadhyay, trustee of the central board of EPFO.
According to EPFO calculations, after paying 8.5% interest for 2019-20, you will be left with a surplus of ₹700 crore, against ₹349 million rupees in the previous fiscal year.
The retirement fund body’s earnings in March were lower than expected due to the pandemic. In preparing the March revenue projection for the given financial year, EPFO had factored revenue between ₹3500 crore and ₹Rs 4,000 crore for dividends and sale of exchange-traded funds.
The retirement fund body’s income declined due to the poor market situation, an EPFO official told Mint, requesting anonymity. However, he declined to comment on the course of action if the market collapse continues amid the slowdown in the economy.
In March, the pension fund manager had announced an interest payment of 8.5% for 2019-20, the lowest in seven years. The 8.5% rate was 15 basis points below the 2018-19 fiscal year payment, affecting earnings for more than 50 million active subscribers. The last time EPFO paid an 8.5% fee was in 2012-13.
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