A meeting of the Central Board of Trustees (CBT) held in Srinagar on Thursday decided to send its proposal to the Finance Ministry regarding an annual rate of interest of 8.5% to the member accounts, which has been recommended by the Central Board of Trustees (CBT) Employees Provident Fund Organisation (EPFO) for 2020-21.

According to a government release, the rate would be officially notified in the government gazette following which the EPFO would credit the interest into the accounts of subscribers. The release told that the EPFO has produced returns of not less than 8.5% consistently since 2014-15. A high EPF interest rate with compounding makes a notable difference to subscriber gains. This is although the EPFO having consistently followed a conservative approach towards investment, emphasizing the safety and preservation of a principal-first approach. The EPFO's risk appetite is very less as it also involves investing in the poor man’s retirement savings.

Virjesh Upadhyay, CBT member, and former general secretary, Bharatiya Mazdoor Sangh (BMS) spoke that a decision was taken to not make changes to the interest rate based on the balance sheet of the EPFO. He told that India’s economy is looking good, despite a recession worldwide and there is no reason to change the interest rate. According to the Labour Ministry, the EPFO sensibly started investing in equity through exchange-traded funds based on the NSE 50 and BSE 30 indices from 2015-16. The investment in equity assets started from 5% in FY15 and went up to 15% of the incremental portfolio.