Fintotal News Analysis | EPF rate may be hiked to 8.6% for 2012-13
EPF rate may be hiked to 8.6% for 2012-13
Ruby Jacob, 27 Apr 2012

After the rate cut in Employee Provident Fund in the last financial year that was received with vehement protests in March, the union government has announced today that EPF deposits could earn higher at 8.6% this financial year 2012-13.

EPF rate was brought down by EPFO from 9.5% in 2010-11 to 8.25% in 2011-12 citing less revenue from the fund. This year, as rates on Special Deposit Schemes (SDS) has been raised to 8.6%, the Central Board of Trustees (CBT) of the fund, which is the PF rate administering board,  believed it was possible to raise EPF rate. The bulk of EPF deposits - over Rs 55,000 crore - is parked in SDS.

SDS was launched in 1975 to provide better risk free returns to non-government provident funds, gratuity funds and superannuation. The EPFO considers the SDS a safe haven for its funds since funds are relatively safe guarded.

Union labour minister Mallikarjun Kharge made the announcement in Rajya Sabha today about the rate hike. This set to benefit over 5 crore subscribers of EPF, among whom are retirees, who at least in part depend on returns from EPF.

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