Retirement fund body EPFO on Tuesday decided to provide interest on inoperative accounts from April 1, a move which will benefit over nine crore such account-holders having total deposits of over Rs 32,000 crore.
The decision was taken by the Employees’ Provident Fund Organisation’s (EPFO) apex decision making body Central Board of Trustees’ headed by Labour Minister Bandaru Dattatreya.
“UPA government stopped interest on inoperative accounts. Now we have taken a pro-worker decision. The UPA government which was claiming to be a pro-worker, stopped the interest on inoperative accounts.
“Now, we have decided to credit interest in inoperative accounts. There will not be any inoperative accounts,” Dattatreya told reporters after the CBT meeting here.
He also informed that interest on deposits in inoperative accounts will be credited from from April 1.
Inoperative accounts are those wherein the contribution has not been received for 36 months.
EPFO had stopped payment of interest to such accounts from April 1, 2011. The move was aimed at discouraging parking of funds with EPFO in these dormant accounts.
The decision will benefit over nine crore such account holders having total deposit of around Rs 32,000 crore.
When asked about a proposal on enhancing proportion of incremental investments of the EPFO in government securities (G-Sec) from 50 per cent to 65 per cent, Labour Secretary
Shankar Aggarwal said, “It has already been decided by the Ministry of Finance.”
The Secretary said that the limit of 50 per cent was enhanced as they were getting good offers but unable to invest in such instruments as the limit had been exhausted.
“If we get higher returns in G-Secs then we should be allowed to invest more in these instruments,” he said further.
The Board also gave in-principle approval to restructuring of the EPFO as recommended by a sub-committee.
“We have taken decision regarding (cadre) restructuring of the EPFO. There will be a Career Advancement Scheme for over 20,000 employees of EPFO. They are waiting their due
promotions for 19 years,” Dattatreya said.