Provident fund rate cut to 4-decade low, minister cites market situation

Employees' provident fund interest rate for 2021-22 has been slashed from the existing 8.5 per cent to 8.1 per cent for 2021-22 on March 12. This is the lowest rate since 1977-78, when it was 8 per cent. The decision was made during a meeting of EPFO's central board of trustees. The meeting was held in Guwahati.

Labour minister Bhupender Yadav while elaborating on the board's decision said that the interest rate was finalised after keeping in mind the prevailing international conditions and the market situation.

The board's recommendation will now be sent to finance ministry. Once the finance ministry ratifies the board's decision, EPFO will direct its field offices to credit the interest income calculated at the new rate of 8.1 per cent for 2021-22 in the subscribers' accounts.

Following the Covid-19 pandemic, the retirement fund body faced large withdrawals and lesser contributions. The EPFO had settled 56.79 lakh claims worth Rs 14,310.21 crore issued under the advance facility as of December 31.