The Employees’ Provident Fund Organisation (EPFO) has decided to keep the interest rate unchanged at 8.5 per cent for financial year 2019-20. However, the interest payable to provident fund subscribers will be paid in a staggered manner due to exceptional circumstances arising out of Covid-19 pandemic, Ministry of Labour & Employment said in a press release. For now, the EPFO will pay interest rate at 8.15 per cent and remaining 0.35 per cent will be credited by December, the ministry noted.

“In view of exceptional circumstances arising out of Covid-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate @ 8.50% to the Central Government.,” the ministry said in a press release.

The 8.15 per cent interest amount will come from EPFO’s debt income and remaining 0.35 per cent from the sale of exchange traded funds (ETFs), subject to their redemption by 31st December, 2020, the ministry added.

Earlier this year in March, the retirement fund body had lowered the interest rate to 8.5 per cent. The EPFO had paid interest rate of 8.65 per cent in financial year 2018-19.

“Because of the bad market conditions, the earnings of EPFO has been affected. That is why CBT has decided that EPFO will pay 8.5 per cent interest in two installments this year: 8.15 per cent now from debt income and the rest 0.35 per cent by December, 2020. We have decided to keep our commitment to give 8.5 per cent,” Virjesh Upadhyay, member of central board of trustees, EPFO and general secretary of RSS-affiliated Bhartiya Mazdoor Sangh told NDTV.

Employees’ Provident Fund Organisation is the provider of the Employees’ Provident Fund, a pension scheme for salaried persons in the country.