Update on Provident Fund form Towers Watson India
Update on Provident Fund Greetings from Towers Watson India.
The Ministry of Labour & Employment has declared an interest rate of 8.75% on Provident Fund deposits for the year 2014-2015. As is the process, the discussion for the rate on the PF balances was initiated by the EPFO, who made a preliminary declaration of interest in August 2014. This decision was validated by the Ministry of Finance in December 2014. The final validation was from the Ministry of Labour. On 4 February, EPFO has sent a circular to their regional office to retain 8.75% as the interest rate for the year 2014-15.
Please find below the link to the circular for your reference: http://www.epfindia.com/Circulars/Y2014-15/Invest_ROI_2014-15_36393.pdf
8.75% will apply to balances from 1 April 2014 for any withdrawals after that period – until 2015-2016 rate is declared.
Any exempt Provident Fund trust that has not earned at least 8.75% will either need to dip into their reserves (if the trust deed allows) to top up members’ interest allocations or obtain a shortfall contribution from the sponsoring employer.
In another development, the EPFO has also decided to launch the facility for online submission for settlement claims from mid-December. As of now, it is done manually and the forms have to be submitted at the local PF office.
The EPFO plans to leverage technology and the Aadhaar number linkage to the PF accounts to ensure timely authentication and prevent frauds in the settlement process. As a result, the settlement timeline is expected to come down from 30 days to potentially 3 days when it is fully online. The increasing use of technology to make the systems and processes more efficient and coordinated has meant that the EPFO is reinventing itself. They have also come with the UAN – Universal Account Numbers which is another step in providing a superior employee experience.