The Employees’ Provident Fund Organisation (EPFO) is expected to maintain the interest rate on provident fund (PF) deposits at around 8.25% for the financial year 2024-25, according to a report by the Economic Times. The Central Board of Trustees (CBT) is scheduled to meet on February 28 to finalise the interest rates. If the board opts for 8.25%, it will be the same as last year. EPFO experienced a strong financial year with higher returns on investments and an expanding subscriber base, as reported by ET. However, increased claim settlements resulted in a greater outflow of funds. The decision on the interest rate will directly impact over 65 million subscribers. According to official data cited in the ET report, EPFO has processed over 5 crore claims amounting to Rs 2.05 lakh crore in 2024-25 so far, compared to 4.45 crore claims totaling Rs 1.82 lakh crore in 2023-24. Approval process and governance The proposed interest rate must receive approval from the Finance Ministry before being officially notified and credited to subscribers’ accounts, typically in the second half of the following financial year. In 2023-24, EPFO had declared an 8.25% interest rate on a total principal amount of approximately Rs 13 lakh crore, marking its highest so far. EPFO operates under the governance of a tri-partite Board known as the Central Board of Trustees, which includes representatives from the central and state governments, employers, and employees. The Board oversees the administration of the provident fund, pension, and insurance schemes for employees in the organized sector in India. It is one of the largest organizations globally in terms of clientele and financial transactions. Upcoming CBT meeting and key agenda items The upcoming meeting of the CBT on February 28 is expected to primarily focus on finalising the interest rate for 2024-25, as no decision has been made yet. The formal agenda for the meeting is yet to be circulated, but sources indicate that determining the interest rate will be a priority. The 237th meeting of the CBT of the EPF is scheduled for February 28 an official communication stated. The CBT, chaired by the Union Minister for Labour and Employment, is the apex decision-making body of EPFO and includes representatives from employers’ associations, trade unions, and government officials at both the central and state levels. EPFO had increased the PF interest rate to 8.25% for 2023-24 from 8.15% in 2022-23. In its last meeting on November 30, 2024, the CBT decided that interest would be paid to members until the date of claim settlement. Previously, interest-bearing claims were not processed between the 25th and the end of each month to avoid loss of interest to members. Following this decision, claims will now be processed throughout the month, leading to reduced pendency, timely settlement, and better resource utilization. Growth in contributing establishments and members According to EPFO’s Annual Report 2023-24, approved in the last CBT meeting, the number of contributing establishments rose by 6.6% to 7.66 lakh from 7.18 lakh in 2022-23. The number of contributing members also increased by 7.6%, reaching 7.37 crore in 2023-24 from 6.85 crore in the previous year.Original Article