New Delhi: At least 6 million, or 10-12%, of Employee Provident Fund Organisation’s (EPFO) subscribers will have to wait longer for their 2019-20 interest payment, as inaccuracies in the data of individual subscribers have held up fund transfers to many establishments.
This may also impact the interest earned by the individuals on the enhanced provident fund kitty when interest is credited for 2020-21.
The EPFO had started crediting interest at 8.5% for 2019-20 at the beginning of the new calendar year and so far funds have been transferred to more than 50 million accounts. EPFO has a subscriber base of about 60 million. Usually the process is completed within a week’s time.
Top government sources told ET that the process would take another month or so and the EPFO is expected to credit interest to all subscribers by the end of the current fiscal year.
Every year, the EPFO credits interest on establishment basis and not on individual basis. If the details of even one employee in the establishment do not match, payments to the entire establishment get stuck resulting in delays. This year, this glitch has impacted a considerable number of establishments.
The EPFO is now working on a software upgrade to fix the problem.
“We are trying to update the software so that such problems do not arise in the future,†an official said. “However, that will take some time and we hope the problem doesn’t arise next year when we credit the interest rate for 2020-21,†the official added.
In September last year, the retirement fund body had decided to split payment of the 8.5% interest into two instalments of 8.15% and 0.35%. However, subsequently it decided to credit it in one go after the EPFO was able to offload a proportion of its equity in the market, fetching the requisite amount to pay the entire committed interest at one go.
The EPFO will shortly announce the interest earned on PF deposits for 2020-21 and the same will be credited only towards the end of the next fiscal year. The interest rate of 8.5% for 2019-20 was the lowest in seven years – the same rate was last offered in 2012-13.
