For 2013-14, PF savings will earn 8.75% interest

The recommendation will now be ratified by the finance ministry and then formally notified. The decision would benefit nearly 8 crore subscribers of the EPFO, which along with exempt PF trusts has a corpus of Rs 7 lakh crore. Though this is marginally higher than the 8.5 per cent return in last fiscal, it has, however, failed to please trade union leaders who pointed out that it should have at least matched the retail inflation rate. But the higher interest payout, a last minute revision to the original proposal that sought to keep the rate unchanged, was possible due to a surplus of Rs 43.14 crore. According to calculations, the EPFO has a total liability of Rs 25,005.41 crore in 2013-14 and an estimated income of Rs 25,048.55 crore.

“The fund can very clearly give an interest rate of 8.75 per cent as there is a surplus and concerns over the interest suspense account and inoperative accounts have been fully addressed,” said Central Provident Fund Commissioner KK Jalan. The CBT, the apex decision making body of the EPFO, also announced an interim increase in benefits under the EDLI by 20 per cent up to a maximum of Rs 1,56,000. Under this scheme, the family of a worker will get 20 times the average wage of the worker over the last 12 months subject to a ceiling of Rs 1,30,000 in case of his or her demise during the service period. “The meeting also approved a proposal for an actuarial evaluation of the scheme. This is an ad hoc measure until we get the report,” said Jalan.

The CBT also hiked minimum administrative charges for managing EPF and EDLI schemes to Rs 500 and Rs 200 a month per member for contributing establishments.