EPFO Update: Interest rate on PF deposits to increase for next financial year? Here’s what govt has to say

The EPFO board earlier this month decided to maintain the interest rate on PF deposits unchanged for the current financial year at 8.25% for over 7 crore provident fund contributors. With the government introducing several EPFO reforms, expectations are rising that the PF rate will increase from the current level in the next financial year.

In Parliament, a member recently asked the Ministry of Labour if the Employees Provident Fund Organisation (EPFO) is considering raising the interest rate for provident fund deposits for the coming financial year, and also considering implementing the order of the Supreme Court on higher provident fund pension.

Responding to questions, the Ministry of Labour and Employment informed the Lok Sabha that in accordance with sub-para (2) of Paragraph 60 of the EPF scheme, interest is credited to the members’ accounts on the basis of monthly running balances, with the interest being credited as of the last day of each financial year. “The amount of interest is calculated based on the interest/dividends earned by EPFO on investment of the EPF Corpus in various instruments like government securities, debt instruments, equities etc., as per the notified pattern of investment.”

Also read: EPFO interest rate unchanged at 8.25% for FY2024-25

It also informed the House that the EPFO has taken several steps to implement the directions contained in Supreme Court judgement on higher provident fund pension. “An online facility was provided and a total 17.49 lakh applications for validation of joint option/joint options were successfully submitted by the applicants,” the ministry said in its reply to the question.

The member also sought to know about the changes made to the Employees Deposit Linked Insurance (EDLI) scheme.

Three major reforms were approved in the EDLI scheme in the 237th meeting of the Central Board of Trustees (CBT) of EPFO:

The condition of at least one year of service was removed – Earlier the benefit of insurance was available only to the families of those employees who had contributed to EPF for at least one year. Now this condition has been removed.

Compulsory of continuous contribution abolished – If an employee dies and there has been no contribution to EPF in recent months, his family will still get insurance benefits.

Benefit of continuous service – If an employee moves from one organization to another and there is a little gap in between, then that period will be considered as ‘continuous service’. This will not cause any problem in insurance claim.

The government has also given details about the steps taken for higher pension.

Also read: EPFO 3.0: How will it benefit over 7 crore EPF members?

The Supreme Court had given its verdict on the EPFO ​​​​higher pension scheme on 4 November 2022. To implement this order, the EPFO ​​​​has taken several important steps:

Online application process – More than 17.49 lakh applications have been successfully submitted so far.

Coordination with employers – Virtual conferences (VC) are being held regularly to obtain salary and other documents.

Deployment of additional staff – Additional staff has been deployed in regional offices for faster disposal of pension cases.

Help desk facility – Help desks have been set up in every EPFO ​​​​field office to assist employees and employers.

Deadline extended – The deadline for employers to submit salary details was extended several times, and now the last chance has been given till 31 January 2025.

EPFO kept rate unchanged at 8.25% for FY2024-25

The Central Board of Trustees of the EPFO in its 237th meeting held earlier this month approved the interest rate for financial year 2024-25 at 8.25%, keeping the rate unchanged.