epfo-set-to-retain-pf-rates-decision-on-feb-28

The Employees’ Provident Fund Organisation (EPFO) is likely to retain the interest rate on provident fund deposits for the 2024-25 financial year at above 8 per cent, with estimates placing it close to the 8.25 per cent announced for the previous year.

 

The final decision will be taken when the central board of trustees (CBT) convenes on 28 February, according to sources familiar with the matter.

 

Ahead of the meeting, the EPFO’s investment committee and accounts committee, formerly the Finance, Investment and Audit Committee, will assess the organisation’s income and expenditure for the current financial year.

 

These panels will work to determine an interest rate that ensures a significant surplus for the retirement fund body, providing it with a financial cushion for any future contingencies, sources said.

 

An official, speaking on condition of anonymity, stated that while the EPFO has seen higher returns on its investments and an expansion in its subscriber base, there has also been a considerable rise in claim settlements this year.

 

Official data reveals that the EPFO processed more than 50.8 million claims amounting to ₹2.05 lakh crore in 2024-25, compared to 44.5 million claims worth ₹1.82 lakh crore settled in 2023-24.

 

"The committees concerned are reviewing the financials and are expected to propose an interest rate in line with previous years," the official said.

 

The EPFO currently has over 65 million subscribers. In 2023-24, the organisation provided an interest rate of 8.25 per cent, marking its highest-ever payout, based on an income of ₹1.07 lakh crore from a total principal amount of approximately ₹13 lakh crore.

 

This was an increase from the 8.15 per cent interest offered in 2022-23, which was based on earnings of ₹91,151.66 crore from a principal of ₹11.02 lakh crore.

 

The interest rate for any given financial year is proposed by the EPFO and approved by the CBT before being forwarded to the finance ministry for final approval.

 

Once sanctioned, the rate is notified and credited into the accounts of EPFO subscribers, typically in the second half of the following financial year.