EPFO announces 8.75 per cent interest rate on PF deposits for 2013-14

Retirement fund body EPFO on Monday raised the PF interest rate from 8.5 percent to 8.75 per cent for 2013-14.

EPFO was widely expected to retain 8.5 per cent interest on PF deposits for its over 5 crore subscribers in 2013-14.

The Employees' Provident Fund Organisation's apex decision making body - Central Board of Trustees (CBT) – met on Monday to decide on the PF interest rate for this fiscal.

According to the agenda for the trustees\' meet, 8.5 per cent interest would have left a small surplus of Rs 56.96 crore.

The EPFO, which is estimated to have an income of Rs 20,796.96 crore in the current fiscal, needed Rs 20,740 crore to pay 8.5 per cent interest to the subscribers.

EPFO had provided 8.5 per cent interest in the 2012-13 fiscal, which was higher than 8.25 announced in 2011-12.

According to estimates, hiking the interest payment by half a per cent to 9 per cent would require an additional amount of Rs 1,220 crore, which was considered not feasible.

"Payment of interest to the members is expenditure for the Trust (EPFO), which is to be met out of its earnings. Thus, the rate of interest should be commensurate with the total earnings of the Trust," the EPFO had said earlier in its proposal to the trustees.

The trustees met on Monday after a gap of almost one year. (PTI)