EPFO likely to credit 8% in poll year

The Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO) is likely to recommend an interest rate of about 8% for FY24 when it meets on Saturday, people familiar with the matter told ET. The EPFO had credited 8.15% interest in FY23 and 8.10% in FY22.

The retirement fund body is also likely to seek the board's approval to substantially increase its investment in stocks to 15% from around 10% now to enhance the return on investments. "This being an election year, the government will ensure a sustainable rate of return on provident fund (PF) deposits which is also at par with the existing rates to avoid any backlash," said an EPFO board member.

The state-run retirement fund has over 60 million subscribers. The finance ministry notifies the final rate of interest after taking the recommended rate into consideration. The EPFO has circulated the agenda for the 235th meeting of the CBT scheduled for February 10 that includes an update on pensions, budgetary estimates and compliance issues.


While the interest rate and equity investment matters are not part of the agenda circulated by the EPFO, the retirement fund body is likely to introduce the two items before the CBT with the permission of its chairman, the labour minister. The investment pattern notified by the finance ministry allows 5-15% of incremental investments in stocks, but the EPFO has to seek the board's approval to enhance its equity exposure.