Employees Provident Fund Organisation (EPFO) on Tuesday decided to set the interest rate at 8.15 per cent for 2022-23 in respect of the provident fund accumulations in members accounts. This interest rate was higher than that of 8.1 per cent provided for the previous fiscal.

The EPFO had in March 2022 lowered the rate on the fund for 2021-22 to an over four decade low of 8.1 per cent for its nearly five crore subscribers from a level of 8.5 per cent in 2020-21.

The rate hike decision was taken at the ongoing two-day meeting of EPFO’s Central Board of Trustees (CBT) in New Delhi. The CBT, which is the apex decision making body of the EPFO, is headed by the Union Labour and Employment Minister Bhupender Yadav.

The EPFO decision will now be sent to the Finance Ministry for its concurrence and ratification. Once ratified, the interest will be credited by the EPFO to the five crore PF subscribers, sources said.

The CBT recommended the amount balancing both the growth and surplus fund to have safeguards.The recommended 8.15% interest rate safeguards the surplus as well as guarantees increase income to members. In fact, the latest interest rate and the surplus of ₹663.91 crore are higher than the last year, an official release said.

₹ 90,000 crore distribution

The Board’s recommendation involves distribution of more than ₹90,000 crore in the members’ account on the total principal amount of about ₹11 lakh crore which was ₹77,424.84 crore and ₹9.56 lakh crore respectively in the FY 2021-22. 

The total income recommended for being distributed is highest till date. The growth in income and the principal amount is respectively more than 16% and 15% as compared to last financial year 2021-22, release said.

EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk. 

Considering the credit profile of the EPFO investment, the interest rate of EPFO is higher than other comparable investments avenues available for subscribers, the release added.