EPFO mulls rate cut on Provident Fund deposits to 8.5% for FY20
EPFO mulls rate cut on PF deposits to 8.5% for FY20
New Delhi: Salaried workers might face a cut in interest on their provident fund (PF) deposits this year with lower yields seen on investments by the Employees’ Provident Fund Organisation (EPFO).
The EPFO is considering a cut of fifteen basis points within the rate on PF deposits in FY20 to eight.5%. Provident fund deposits had fetched eight.65% in FY19. The difficulty is probably going to be preoccupied at the central board of trustees (CBT) meeting of the EPFO on March five.
The superannuation body could realize it troublesome to stay the rate unchanged for this year, an individual attentive to the financials told ET. The earnings on longterm fastened deposits, bonds and government securities square measure down 50-80 basis points over the past one year, same the person. One basis purpose is common fraction of a decimal point.
The Finance Investment & Audit Committee (FIAC) can take a final decision simply before the CBT meet on the speed of coming back on PF deposits, reckoning on the precise earnings of the superannuation body.
Rs 4,500 large integer Exposure in DHFL
The decision are bestowed to the CBT at the meeting and it'll then take an invoke the matter. The EPFO has investments of quite Rs eighteen hundred thousand large integer, of that regarding Rs four,500 large integer was in Dewan Housing Finance house. Ltd (DHFL) and Infrastructure Leasing & money Services (IL&FS), each of that are sick by their inability to form payments. the primary is undergoing bankruptcy resolution when run direction and therefore the direction and therefore the second goes through a government-supervised rescue program
The EPFO invests eighty-fifth of its annual accruals within the debt market and 15 August 1945 inequities through exchange-listed funds (ETFs). At the tip of March last year, the EPFO had an accumulative investment of Rs seventy-four,324 large integers in equities, taking a come back of fourteen.74%.
However, the govt doesn’t wish to fuel discontent among employees, WHO won’t be pleased with lower PF rates.
“Interest rate on EPFO could be a huge sentiment booster and any cut on that at now could additional hit the worker sentiment,” same one in each of the persons cited higher than.
The CBT headed by the labour minister is that the apex decision-making body of the EPFO that has a vigorous subscriber base of 600,000.
Some of the opposite problems that may be preoccupied with thought embody partaking TCS particle for conducting laptop information entry ability tests and accumulative performance analysis of portfolio managers for the amount over Sep thirty, 2019.
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