NEW DELHI: The central board of trustees of the Employees Provident Fund Organisation has decided to give benefit of accrual of interest on the inoperative accounts from April 1, reversing the decision taken in 2011 by the then UPA-II government.
This will benefit a large section of the estimated nine crore inoperative accounts of subscribers switching jobs. EPFO has estimated that over Rs 32,000 crore is stuck in these inoperative accounts.
“UPA government stopped interest on inoperative accounts. Now we have taken a pro-worker decision. The UPA government which was claiming to be a pro-worker, stopped the interest on inoperative accounts. Now, we have decided to credit interest in inoperative accounts. There will not be any inoperative accounts,” labour minister Bandaru Dattatreya said on March 29 after the 212th meeting of the board of trustees.
He also informed that interest on deposits in inoperative accounts will be credited from April 1. Inoperative accounts are those wherein the contribution has not been received for 36 months. EPFO had stopped payment of interest to such accounts from April 1, 2011. The move was aimed at discouraging parking of funds with EPFO in these dormant accounts.
When asked about a proposal on enhancing proportion of incremental investments of the EPFO in government securities (G-Sec) from 50 per cent to 65 per cent, Labour Secretary Shankar Aggarwal said here on Tuesday that “It has already been decided by the Ministry of Finance.”
He said that the limit of 50% was enhanced as they were getting good offers but unable to invest in such instruments as the limit had been exhuasted.
“If we get higher returns in G-Secs then we should be allowed to invest more in these instruments,” he said. It also gave in-principle approval to restructuring of the EPFO.
