Edu-Visor : EPFO seeks to transfer ₹100 crore of unclaimed deposits to elders' fund

EPFO seeks to transfer ₹100 crore of unclaimed deposits to elders' fund

The proposal will be taken up for consideration by the central board of trustees of EPFO at its upcoming meeting on Saturday, people familiar with the development told ET.

The Employees' Provident Fund Organisation (EPFO) has moved a proposal to transfer ₹100 crore from its unclaimed funds, in excess of ₹58,000 crore, to the Senior Citizens' Welfare Fund, in line with a 2015 government directive.

The proposal will be taken up for consideration by the central board of trustees of EPFO at its upcoming meeting on Saturday, people familiar with the development told ET.

As per the finance ministry notification, issued in 2015, savings that remain unclaimed in EPF and PPF accounts and other small savings schemes for seven years will have to be diverted to the Senior Citizen's Welfare Fund.

But these funds have remained with the EPFO.

The proposal to transfer unclaimed funds to the senior citizens' funds is expected to face resistance from the trade unions. "We will consider the government's proposal of shifting part of the unclaimed money. We feel that it is not unclaimed money but rather unsettled money and hence should remain with the EPFO," a representative of a national trade union said on condition of anonymity.

Interest rate
The board will also decide on the interest rate for 2021-22, said another person.

The interest rate could be retained at the 2020-21 level of 8.5% or marginally lowered to 8.35-45% in view of the recent volatility in the stock market following the Russia-Ukraine conflict, according to the people.

"We would like to retain the interest rate at 8.5%. However, the impact of the Russia-Ukraine war on the stock market could impact the income calculations and thus the interest rate on PF deposits for 2021-22," said a member of the Finance Investment and Audit Committee, who did not wish to be identified.

Team Edu-Visor