The government announced an EPF rate of 8.1% for 2021–2022 in March 2022, the lowest interest rate since 1977–1978. It is anticipated that the interest rates would remain at par, as per the TOI release.
Also read: EPFO issues guidelines for higher pension from EPS: Know where, how to apply
The declaration of interest comes at a time when the government has stated that interest for 2021-22 is still being credited and was around 98% complete as of March 6. The delay in EPF interest credits was attributed to a software upgrade required as a result of the implementation of TDS on yearly EPF contributions exceeding Rs 2.5 lakh, added ToI.
Will EPF interest be hiked?
The retirement fund body had announced the interest rate of 8.1% for 2021-22, which was the lowest in four decades and was significantly lower than 8.5% credited in the preceding year.
According to an Economic Times news report, “”The government is unlikely to go for any major tweaking in the interest rates as it heads into key state assembly elections this year followed by general elections next year.”
Pension on higher wages
The meeting is significant because the pension fund manager will present a status note on the Supreme Court’s November 4, 2022 judgement regarding pension on higher wages, an issue that has caused considerable anxiety among current and prospective pensioners due to procedural complexities in the application process, stated the ToI.
What is pension on higher wages?
The Employees Pension Scheme (EPS) Employees Provident Fund Organization (EPFO) announced rules outlining the process for qualified employees to apply for increased pensions (EPS). Now anyone can apply for a larger pension under EPS, including those who had previously refrained from doing so but were eligible to. The current date for EPS higher pension applications is March 3, 2023.
As per the circular, in compliance of the SC judgement, the following employees with their employers may submit joint option under para 11 (3) and 11 (4) to the concerned Regional office:
- The employees and employers who had contributed under paragraph 26(6) of EPF scheme on salary exceeding the prevalent wage ceiling of Rs 5000 or Rs 6500 AND
- Did not exercise joint option under the proviso to Para 11 (3) of the pre-amended scheme (since deleted) while being members of EPS, 1995; AND
- Were members prior to 1.9.2014 and continued to be a member on or after 1.9.2014
Everyone who was an employee as of August 31, 2014 and was a member of the Employees’ Provident Fund (EPF) but did not choose a higher pension under the EPS has the opportunity to do so on or before March 3, 2023.
