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The Employees’ Provident Fund Organisation (EPFO) may reduce the interest on the provident fund of salaried employees due to lower yields seen on investments, the Economic Times reported.
The EPFO is mulling to slash 15 basis points in the interest rate on PF deposits in FY20 to 8.5 per cent. In 2019, the PF deposit stood at 8.65 per cent.
The matter will be discussed on March 5 at the Central Board of Trustees (CBT) meeting of the EPFO.
According to a source cited in the ET report, it is difficult for the retirement fund body to maintain the same interest rate this year. The source added that the earning on long-term fixed deposits, bonds and government securities are down 50-80 basis points over the past one year.
One basis point is one-hundredth of a percentage point.
The Finance Investment & Audit Committee (FIAC) will reanalyse the rate of return on PF deposits before taking a final call at the CBT meeting. The decision will be taken after looking at the exact earnings of the retirement fund body, ET report added.
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