Many members and employees’ representatives have raised the issue of not crediting the interest rate on EPF for 2021-22, which was fixed at 8.1%.
Employees’ provident fund (EPF) member accounts of 98% of contributory firms or establishments have been updated with the latest interest credit till March 6, 2023, Parliament was informed on Monday.
Many members and employees’ representatives have raised the issue of not crediting the interest rate on EPF for 2021-22, which was fixed at 8.1%.
“This (interest crediting) is an ongoing process, which has been taken up in a scheduled manner post-software development and by March 6, 2023, the process has been completed in respect of 98% of contributory establishments,” stated the minister of state for labour and employment Rameshwar Teli in a written response to the Lok Sabha on Monday.
According to Article 60 (1) of the Workers’ Provident Fund (EPF) Plan, 1952, EPFO is required to credit interest to each member’s account at a rate that the federal government may decide in agreement with the Employees’ Provident Fund’s Central Board of Trustees (CBT) (EPF).
Till March 6, 2023, accounts of members of 98% of the contributory establishments have been credited with interest, Teli said, adding that this is an ongoing process, which is taken up in a scheduled manner without hampering the regular claim settlements.
Teli explained that account updation with interest credit is a comprehensive exercise requiring scrutiny of each individual transaction made in respect of each and every individual member’s accounts, thus making the entire process very exhaustive.
Updating a member’s passbook with interest is an entry process only, the date on which the interest is entered in the passbook of the member has no actual financial bearing as the interest earned for the year, the minister explained.
The annual ending amount is always increased by the sum of the monthly running balances. As a result, he continued, the member does not experience any financial loss.
He emphasised that the accounting procedure had to undergo a significant adjustment due to the implementation of the new TDS (tax deductions at source) provision from 2021–2022, making the exercise more time-consuming and necessitating an increased level of inspection.
The member’s passbook needed to be updated as well in order to give them all the information they needed in a more accessible and understandable way. According to him, the procedure needed to develop new software is to test, debug, and stabilise crucial components.
He stated that Provident Fund Organisation (EPFO) employees had settled more than 3.6 crore claims submitted by members with up-to-date interest.
Meanwhile, all eligible pensioners under the EPS 95 who retired before September 2014 can apply to opt for a higher pension by May 3 this year.
The deadline to opt for higher pensions for these pensioners ended on March 3, 2023.
“Now, on demand of the employees’/employers’ associations, the Chairman, Central Board of Trustees has extended the time for submitting applications for validation of joint options from such employees till 3rd May 2023,” a labour ministry statement said on Monday.
