The Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO) is anticipated to propose an interest rate of approximately 8% for the fiscal year 2023-2024, as per sources familiar with the matter. In previous years, EPFO had disbursed an interest rate of 8.15% in FY23 and 8.10% in FY22. The CBT is scheduled to convene on Saturday to discuss this matter. Additionally, EPFO is considering seeking approval from the board to raise its investment in stocks from the current 10% to 15% in order to enhance returns on investments. According to an EPFO board member quoted by ET, given that it is an election year, the government aims to maintain a sustainable rate of return on provident fund (PF) deposits, aligning it with existing rates to prevent any potential backlash.
The state-managed retirement fund body has a subscriber base of over 60 million individuals. The final interest rate for the provident fund will be determined by the Ministry of Finance after considering the proposed rate. EPFO has shared the agenda for the 235th CBT meeting scheduled for February 10, which includes discussions on pensions, budget estimates, and compliance matters.
Although not initially included in the circulated agenda, discussions on interest rates and equity investments are likely to be introduced during the CBT meeting with approval from the chairman, the labour minister. While the finance ministry permits incremental investments in stocks ranging from 5% to 15%, EPFO requires board approval to increase its exposure to equities.
