EPFO to give interest on inoperative accounts from April 1

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, 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 30,000 crore is stuck in these inoperative accounts.

“We have taken a pro-worker decision to give interest on inoperative accounts with effect from April 1, 2016,” labour minister Bandaru Dattatreya said on March 29 after the 212th meeting of the board of trustees.

Inoperative EPF accounts are those where there has been no contribution from either the employee or the employer for 36 months.

The decision not to give interest on these accounts was taken to persuade employees to withdraw their money or merge it with active accounts.

Besides, the board has given an in-principle approval to the restructuring of the organisation as recommended by the sub-committee set up for the purpose.

“A small committee under the CPFC (Central Provident Fund Commissioner) will address all anomalies in a month’s time, after which the exercise will start,” Dattatreya said.