EPFO defers one part of the interest payment due to COVID-19

The Employees' Provident Fund Organisation (EPFO) will pay 8.50 per cent interest rate to the formal sector employees for the last fiscal year in a staggered manner due to the impact of the coronavirus pandemic.

The total payment would include 8.15 per cent interest rate from debt income and the balance 0.35 per cent from the sale of ETFs subject to their redemption by December 31, 2020, said an official statement.

The decision was at the meeting of EPFO's Central Board on Wednesday.

"In view of exceptional circumstances arising out of Covid-19, the agenda regarding interest rate was reviewed by the Central Board and it recommended the same rate at 8.50 per cent to the Central government. It would comprise of 8.15 per cent from debt income and balance 0.35 per cent (capital gain) from the sale of ETFs subject to their redemption by 31st December, 2020," the Labour and Employment Ministry statement said.

The Central Board also recommended to account such capital gains in the income of the financial year 2019-20 as being an exceptional case.

It also accorded approval for amendment of paragraph 22(3) of Employees' Deposit Linked Insurance Scheme, 1976 to enhance the maximum assurance benefit to Rs 7 lakh from the present maximum assurance benefit of Rs 6 lakh.

"This amendment will provide additional succour to families and dependents of members of the scheme in case of their unfortunate death while in service," it said.

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