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Big change in EPFO, a separate reserve fund is being created! Now PF money will be more secure.

Siddhi Jain | February 17, 2025 8:15 PM CST

According to the report, EPFO will create a reserve fund every year by keeping aside the additional income from interest. This fund will be used at a time when the return on EPFO's investment decreases.

There is great news for crores of members of the Employees' Provident Fund Organization (EPFO). The government is now considering creating an 'Interest Stabilization Reserve Fund' for EPFO. Its purpose will be to give a stable interest rate to more than 6.5 crore members of EPFO on their Provident Fund (PF) contributions.

Will be saved from market fluctuations

According to a report by The Economic Times, the Ministry of Labor and Employment has started an internal study in this regard. Based on this study, EPFO members will be able to get a stable interest rate separate from the return on their investment. It is believed that this step is being taken to protect the members from the impact of market fluctuations.

How will this fund work?

According to the report, EPFO will create a reserve fund every year by keeping aside the additional income from interest. This fund will be used at a time when the returns on EPFO's investments decrease. With this, members will continue to get a fixed interest rate, no matter how much the market fluctuates.

When will the new rules be implemented?

At present, this scheme is in the initial stage and it can be finalized by the end of this year. If the scheme gets approval from the Central Board of Trustees (CBT) of EPFO, then it can be implemented from 2026-27. Let us tell you, that the Central Board of EPFO is headed by the Minister of Labor and Employment.

Fluctuation in interest rates

Let us tell you, that the interest rates of EPFO have been changing from year to year. For the financial year 2023-24, EPFO had fixed the interest rate for members at 8.25 percent. It is estimated that this rate can also be retained for 2024-25 in the CBT meeting to be held on 28 February.

According to the Mint report, EPFO interest rates started from 3 percent in 1952-53 and reached 12 percent in 1989-90. This rate remained till 2000-01, but fell to 9.5 percent in 2001-02. In 2021-22, this rate fell to 8.1 percent, after which it was slightly increased to 8.25 percent.

ATM facility for PF account

In the information given by the government in early January, it was said that soon the members of the Employees Provident Fund (EPFO) will be able to withdraw the money deposited in their PF account from the ATM. For this, they will also be given a separate ATM.