Daijiworld Media Network – New Delhi

New Delhi, Mar 4: Amid weak market conditions and falling interest rates, the Employees' Provident Fund Organisation (EPFO) on Monday recommended retaining the interest rate on provident fund deposits at 8.25% for the current financial year, benefiting nearly 31 crore subscribers.

This marks the third consecutive year the retirement fund body has kept the rate unchanged, after raising it to 8.25% in 2023-24 from 8.15% in 2022-23. In 2021-22, the rate had fallen to a four-decade low of 8.1%.

In a statement, the labour ministry said, “EPFO has maintained strong financial discipline, ensuring stable and competitive returns without straining the interest account. It benefits crores of workers by strengthening their retirement security.”

The decision was taken at a meeting of the Central Board of Trustees (CBT), chaired by Union Labour Minister Mansukh Mandaviya. The recommended rate will now require ratification by the finance ministry before interest is credited to subscribers’ accounts.

An official said EPFO remains committed to safeguarding member contributions from market volatility while delivering prudent and sustainable returns compared to other investment avenues.

“For this purpose, Indian Institute of Management Kozhikode has been asked to examine the possibility of creating an interest stabilisation reserve, which will help ensure consistent returns during periods of volatility,” the official said.

EPFO has around 7.5 crore active members and manages a corpus of nearly Rs 30 lakh crore invested across government securities, equities and corporate bonds. As of December 31, nearly 88% of its investments were in government bonds, while about 10.6% were in equities.

Between April and February of the current financial year, the organisation’s income was estimated at over Rs 1.4 lakh crore, reflecting steady inflows despite challenging market conditions.