The Employees Provident Fund Organisation (EPFO) board on Wednesday, September 9, decided to credit an interest rate of 8.15 per cent out of the 8.5 percent to its subscribers for 2019-20 as of now.
This decision was taken in the EPFO's central board of trustees meeting chaired by labour and employment minister Santosh Kumar Gangwar today.
During a meeting today, the board decided that the balance interest of 0.35 percent for 2019-20 will be paid in December as the EPFO is staring at a shortfall of Rs 2,500 crore in 2019-20 if it gives out the interest rate of 8.5 per cent to its subscribers at one go.
"There is no going back on 8.5% rate for FY20, but the current situation has pushed us to go for two instalments. Some of the investments could not be encashed due to bad market situation, hence this new formula," said Virjesh Upadhyay, a central board trustee of the EPFO to Mint.
The remaining amount will be paid to the EPF subscribers through dilution of equity investments, the retirement fund body said citing the Covid-19 pandemic's impact on its income.
As per a Mint report, EPFO's ETF investments worth Rs 1 lakh crore have generated negative returns, which could hurt subscriber payout.
