EPFO interest rate for 2021-22 slashed from 8.5% to 8.1%, lowest in over 4 decades

• The Employees Provident Fund Organisation has slashed interest rate on provident fund deposits to 8.1% for 2021-22 from 8.5% credited in 2020-21 and 2019-20.
• This is the lowest in more than four decades.
• The decision was taken at the EPFO’s recently held board meeting in Guwahati.

More about the news

• The interest rate of 8.1% has been declared based on EPFO’s estimated income for the year at Rs 76,768 crore.
• This will leave the retirement fund body with a surplus of Rs 450 crore.
• The move is expected to hit the earnings of over sixty million EPFO subscribers.
• The EPFO had credited 8.5% in 2019-20 and 2020-21 while it was 8.65% in 2018-19, 8.55% in 2017-18, 8.65% in 2016-17 and 8.8% in 2015-16.
• This step has been taken keeping in consideration the global situation and the equity market.
• So there is a need to maintain a balance of investment with social security.

Central board of trustees of EPFO or CBT

• It is a tripartite body involving government, workers and employers’ representatives
• The decision of CBT is binding on EPFO.
• It is headed by the labour minister.