New Delhi: The government is contemplating on creating an ‘Interest Stabilisation Reserve Fund’ for Employees’ Provident Fund Organisation (EPFO). The purpose of this step of the government is to provide stable interest to more than 6.5 crore members of EPFO on their Provident Fund contributions.
According to The Economic Times report, the Ministry of Labor and Employment has kickstarted an internal study in this regard. It is being said that the EPF members are to be paid a fixed interest apart from the returns on their investments.
Reserve Fund to Protect EPFO Members from Market Volatility
With such a step, the government aims to protect the EPF members from the impact of market fluctuations, so that they get stable interest and there is no loss on their earnings. Investing in the market is risky, in such a situation the reserve fund of EPFO will be able to give assured returns to the members.
According to the report, EPFO is expected to create a reserve fund every year by keeping aside the interest income. The fund will be used when the returns on EPFO’s investments reduce. This will help the members receive fixed interest, no matter how much fluctuation there is in the market, it will not affect their interest.
This scheme of EPFO Reserve Fund is currently in the initial stage and is expected to be finalised by the end of this year. If the scheme is approved by the Central Board of Trustees of EPFO, it can be implemented from 2026-27.
The interest rates on EPFO vary from year to year. For the year 2023-24, EPFO had fixed the interest rate for members at 8.25 percent. Earlier, members used to get 8.10 interest rate.
Meanwhile, the government in January 2025 announced that the members of the retirement fund body EPFO may soon be able to withdraw their provident fund (PF) money directly from ATMs after the settlement. EPFO is also likely to introduce its cutting-edge software system by June 2025.
The Indian government is considering an Interest Stabilization Reserve Fund for the Employees’ Provident Fund Organisation (EPFO) to guarantee stable interest rates for its 6.5 crore members. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
