There is good news for crores of EPFO members. The government is planning to create a new “Interest Stabilization Reserve Fund” for the Employees’ Provident Fund Organization (EPFO). The main aim of this fund is to provide a stable interest rate on PF contributions to more than 6.5 crore members.
Protection from Market Fluctuations
According to a report by The Economic Times, the Ministry of Labour and Employment has started an internal study on this plan. Based on the study, EPFO members will receive a fixed interest rate on their investments, separate from the returns generated by EPFO’s investments. This will protect members from market ups and downs.
How Will This Fund Work?
As per reports, EPFO will set aside extra income earned from interest each year. This extra money will go into the reserve fund. When EPFO’s investment returns are low, money from this reserve fund will be used to ensure that members continue to get a stable interest rate.
When Will These New Rules Start?
This plan is still in the early stages. If the EPFO Central Board of Trustees (CBT) approves it, the scheme may be implemented by 2026-27. The CBT is chaired by the Labour and Employment Minister.
EPFO Interest Rate Changes Over the Years
EPFO interest rates have changed over time:
- 1952-53: Started at 3%
- 1989-90: Increased to 12%
- 2000-01: Remained at 12%
- 2001-02: Reduced to 9.5%
- 2021-22: Dropped to 8.1%
- 2023-24: Increased to 8.25%
The next CBT meeting on February 28 may decide to keep the 8.25% interest rate for 2024-25.
PF Account ATM Facility Coming Soon
In January 2024, the government announced that EPFO members will soon be able to withdraw their PF money from ATMs. A special ATM card will be provided for this purpose.
