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Hope of higher PF rate

CASH COMFORT

New Delhi, June 6: Over five crore subscribers of the Employees’ Provident Fund Organisation (EPFO) are likely to get an interest rate of 9 per cent in the current fiscal.

The interest rate is a tad higher than the 8.75 per cent given in 2013-14.

According to sources, initial estimates indicate that the EPFO can easily provide a 9 per cent rate of interest on deposits for 2014-15.

“The improved market conditions, especially after the formation of a new government at the Centre, have raised expectations of higher yields on investments,” sources said.

The organisation manages a corpus of over Rs 5 lakh crore. It has received Rs 71,195 crore as incremental deposits from its subscribers under social security schemes run by it during 2013-14, which is 16 per cent higher than the Rs 61,143 crore collected in 2012-13.

“There are also plans to unlock investments of around Rs 55,000 crore in the Special Deposit Scheme (SDS). The government pays a fixed rate of 8 per cent on SDS to the EPFO, which is lower than other investment options available in the present legal frame work,” sources added.

The EPFO is also expected to improve yields or returns on its investment under the new norms prescribed under an investment scheme notified by the labour ministry last year.

The EPFO can invest up to 55 per cent of its funds in debt securities issued by banks, financial institutions and other corporate bodies.

 
 
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