The Employees' Provident Fund Organisation (EPFO) is likely to reduce the interest rate declared for FY20 over falling return on investments and slow cash flow, the Economic Times reported. The interest rate currently stands at 8.5 per cent.
The move, if implemented, will lower the payout on retirement savings of over 60 million EPFO subscribers. The Finance, Investment and Audit Committee (FIAC) is likely to meet to assess the ability to pay the declared interest.
Meanwhile, the 8.5 per cent interest rate, which was declared in March this year is yet to be approved by the Finance Ministry following which the Labour Ministry will notify the changes.
It is to be noted that the government has announced several measures to help employees hit by the Covid-19 crisis. It had lowered the basic pay for employees from 12 per cent to 10 per cent for a period of three months.
ALSO READ: EPFO records 133,000 new enrolments in April amid Covid-19 lockdown
In April and May, the EPFO said it had settled 3.61 million claims amounting to Rs 11,540 crore. Of this, nearly half or 1.55 million claims, amounting to Rs 4,580 crore, were related to the recently introduced Covid-19 advance. The Covid-19 advance has been a great help to EPFO members during these difficult times, especially for the members with monthly wages of less than Rs 15,000. Respecting the social distancing norms at the workplace, EPFO worked with less than 50 per cent staff during the lockdown.
Meanwhile, net employment generation recorded at 133,000 during April 2020 in the formal sector - impacted by Covid-19-induced lockdown, according to the latest EPFO payroll data. The provisional payroll data released by the EPFO last month had earlier showed that the net new enrollments dipped to 572,000 in March this year compared to 10.21 lakh in February 2020. The net new enrollments with the EPFO hovers around 700,000 every month on an average.
However, during 2019-20, the number of net new subscribers rose to 78.58 lakh compared to 61.12 lakh recorded by Employees' Provident Fund Organisation (EPFO) during 2018-19, showed the latest payroll data.
The move, if implemented, will lower the payout on retirement savings of over 60 million EPFO subscribers. The Finance, Investment and Audit Committee (FIAC) is likely to meet to assess the ability to pay the declared interest.
Meanwhile, the 8.5 per cent interest rate, which was declared in March this year is yet to be approved by the Finance Ministry following which the Labour Ministry will notify the changes.
It is to be noted that the government has announced several measures to help employees hit by the Covid-19 crisis. It had lowered the basic pay for employees from 12 per cent to 10 per cent for a period of three months.
ALSO READ: EPFO records 133,000 new enrolments in April amid Covid-19 lockdown
In April and May, the EPFO said it had settled 3.61 million claims amounting to Rs 11,540 crore. Of this, nearly half or 1.55 million claims, amounting to Rs 4,580 crore, were related to the recently introduced Covid-19 advance. The Covid-19 advance has been a great help to EPFO members during these difficult times, especially for the members with monthly wages of less than Rs 15,000. Respecting the social distancing norms at the workplace, EPFO worked with less than 50 per cent staff during the lockdown.
Meanwhile, net employment generation recorded at 133,000 during April 2020 in the formal sector - impacted by Covid-19-induced lockdown, according to the latest EPFO payroll data. The provisional payroll data released by the EPFO last month had earlier showed that the net new enrollments dipped to 572,000 in March this year compared to 10.21 lakh in February 2020. The net new enrollments with the EPFO hovers around 700,000 every month on an average.
However, during 2019-20, the number of net new subscribers rose to 78.58 lakh compared to 61.12 lakh recorded by Employees' Provident Fund Organisation (EPFO) during 2018-19, showed the latest payroll data.
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