EPFO Rules: The biggest question among employees regarding the new labor codes is whether they will change the rules of the Employee Provident Fund (EPF). The government has given a clear answer on this issue in Parliament. In response to a question asked in the Rajya Sabha, the Ministry of Labor and Employment stated that no significant changes are currently planned to the EPFO scheme. According to the government, even after the new labor codes are implemented, the existing EPF system will continue as before for some time.
What did the government say in Parliament?
Rajya Sabha MP Sandosh Kumar P. had asked the government whether changes would be made to the EPFO scheme under the new labor code and whether an increase in the interest rate on EPF deposits was being considered. In a written response to this question, Minister of State for Labor and Employment Shobha Karandlaje clarified the government’s position. She stated that no significant changes to the EPFO scheme are currently planned.
How is the interest on EPF decided?
On this, the Ministry of Labour stated that the interest rate on EPF deposits is determined as per the rules of the Employees’ Provident Funds Scheme, 1952. According to Paragraph 60(1) of the EPF Scheme, the EPFO deposits interest in the accounts of its members at the rate decided by the Central Government in consultation with the Central Board of Trustees (CBT).
The Labour Ministry also clarified that while fixing the interest rate, it is necessary to ensure that the EPF interest account remains financially strong. As per Para 60(4) of the EPF Scheme, the government also has to ensure that there is no excess withdrawal from the interest account while paying interest. This means that while deciding the interest rate, the income generated from EPFO’s investments and its financial position are taken into consideration.
