epfo: EPF price more likely to keep at round 8%

Whereas the earnings of the retirement fund physique of EPFO is being labored upon to reach on the rate of interest for the present fiscal 12 months, official sources mentioned it’s more likely to hover round 8%.

Based on an official, return on EPFO investments this 12 months have been sturdy whereas the Covid withdrawals have come down considerably. With higher returns anticipated on fairness funding, there’s a risk of both retaining the rate of interest at 8.1% or bringing it a tad decrease to eight%, the official mentioned.

“The federal government is unlikely to go for any main tweaking within the rates of interest because it heads into key state meeting elections this 12 months adopted by normal elections subsequent 12 months,” one other official mentioned.

A member of the Finance Funding and Audit Committee of EPFO confirmed to ET that the CBT assembly has been scheduled for the final week of March and the FIAC might meet a day earlier than to suggest the rates of interest for 2022-23. “The venue and the agenda of the assembly has not been shared thus far,” the FIAC member mentioned.

“Nonetheless, no different agenda is extra essential than the rate of interest for the present 12 months. I feel will probably be this solely plus different administrative points,” he mentioned.

The retirement fund physique had introduced the rate of interest of 8.1% for 2021-22, which was the bottom in 4 a long time and was considerably decrease than 8.5% credited within the previous 12 months. This was on an estimated earnings of ₹76,768 crore with ₹450 crore as surplus.

EPFO began investing in equities in 2015-16, placing 5% of its incremental corpus within the first 12 months, 10% within the second 12 months and 15% within the subsequent years. It has made a cumulative funding of ₹1.7 lakh crore, out of which over ₹22,000 crore have been redeemed until March 31, 2022.

EPFO invests its incremental corpus of ₹1.5 lakh crore into fairness within the type of alternate traded funds (ETFS), each on the Nifty and the Sensex platforms.