EPFO NEWS: The government is soon to give a big news to crores of account holders of the Employees Provident Fund Organization (EPFO). The government is now considering creating an ‘Interest Stabilisation Reserve Fund’ for EPFO. Its purpose is to give a fixed interest rate to the EPFO members on their provident fund (PF) contribution.
Government is taking this big step
The government is now looking for this method so that members of the Employees Provident Fund Organization (EPFO) can avoid market fluctuations and get fixed interest rates. According to the report of The Economic Times, the move aims to benefit more than 6 crore account holders, who depend on EPFO for their retirement security. Officials said that the Ministry of Labor and Employment is doing an internal study to create an interest stabilization reserve fund. The goal of this fund is that EPFO customers can get stable interest rates on their provident fund, whether market fluctuations.
Fix interest rate will be available!
Under the scheme, surplus interest will be inserted into a reserve fund, ensuring that customers get fixed interest rates, even if the interest of EPFO decreases. This step will reduce rapid changes in interest rates due to market fluctuations. Although this initiative is still in the initial stage, it is likely to be given a final touch by the end of this year. It can be implemented from 2026-27 after approval from the Central Board of Trust of EPFO.
It is also important to note that the interest rates of EPFO have changed in the last few years. It was 3% in 1952–53, which increased to 12% in 1989–90. This interest rate is the highest rate ever. After this the rate came down to 9.5% (2001-02) and then 8.5% (2005-06). In 2010-11, the interest rate again increased to 9.5% but decreased to 8.25% in 2011-12 and 8.10% in 2021-22. Currently, the interest rate in 2022-23 has increased slightly to 8.15%.