The Employees’ Provident Fund Organisation (EPFO) may lower the 8.5% interest rate announced for FY20 due to a dip in return on investments and slight cash flow, cutting the payout on retirement savings of its 60 million subscribers.
The interest rate was decided on the earnings of FY20, nevertheless, the payout to subscribers will be made in the second phase of the current financial year.
According to the sources, the finance, investment and audit committee (FIAC) of EPFO will soon meet to evaluate its potential to finance the declared interest, sources told ET.
The 8.5% interest rate that got viral in the first week of March has not been given a thumbs-up yet by the finance ministry. The labour ministry can alert the rate, post the finance ministry approves it.
“Disbursal of money based on the interest rate declared for last year will be tough for EPFO as the cash flow has considerably minimised and liquidation of its funds will not be easy at the time of disbursal,” as per the sources.
However, Central provident fund commissioner Sunil Barthwal did not acknowledged to any queries.