The Central Board of Trustees (CBT), Employees’ Provident Fund (EPF), has recommended an 8.25% annual interest rate on EPF accumulations for the financial year 2024-25.
The decision was taken at the 237th meeting of CBT, chaired by Union Minister for Labour & Employment and Youth Affairs & Sports, Dr. Mansukh Mandaviya. Once notified by the Government of India, the Employees' Provident Fund Organisation (EPFO) will credit the interest to subscribers’ accounts.
The EPF continues to be an attractive investment option for salaried individuals as an annual return of 8.25% is better those offered by all small savings schemes including PPF, which offers 7.1% annual interest.
The Board of trustees also approved key modifications to the Employees' Deposit Linked Insurance (EDLI) scheme, aimed at enhancing financial security for EPF members' families. The changes are expected to benefit over 20,000 cases annually. These changes include:
Minimum Benefit for Early Deaths: A life insurance benefit of ₹50,000 will be provided for members who die within one year of joining service. This is expected to help over 5,000 families annually.
Benefit for Deaths After a Non-Contributory Period: EDLI benefits will now be applicable if a member passes away within six months of their last contribution, provided they were not removed from the payroll. This change is expected to benefit over 14,000 cases yearly.
Consideration of Service Continuity: A gap of up to two months between jobs will now be treated as continuous service, ensuring eligibility for benefits between Rs 2.5 lakh and Rs 7 lakh. Over 1,000 families are expected to benefit annually.
Other Key Decisions Taken by CBT:
1. Pension on Higher Wages (PoHW) Implementation: EPFO has processed 72% of applications related to the Supreme Court's November 2022 judgment on pension on higher wages, working in mission mode to expedite the process.
2. Centralized Pension Payment System (CPPS): From January 2025, EPFO has centralized pension disbursement, streamlining payments across all regional offices through the New Delhi branch of SBI. In January alone, Rs 1,710 crore was disbursed to 69.35 lakh pensioners.
3. Rationalisation of Damages on Late PF Payments: To reduce litigation, damages for delayed PF remittances were rationalized to 1% per month from June 2024. A statutory mechanism for automatic abatement of cases upon payment of damages is also under discussion.
4. Approval of EPFO’s Annual Budget: The Board approved the Revised Estimates for 2024-25 and the Budget Estimates for 2025-26 for EPFO and its administered schemes.
The meeting saw participation from employer and employee representatives, senior officials from the Central Government, and EPFO. The approved decisions reflect the government’s continued focus on strengthening social security for workers across India.