Employees may earn interest on inactive EPF accounts
Millions of organised sector employees may start receiving interest payments on their inoperative employees provident fund (EPF) savings.business Updated: Mar 29, 2016 09:51 IST
Millions of organised sector employees may start receiving interest payments on their inoperative employees provident fund (EPF) savings.
The government on Tuesday will review a four-year old decision which barred inoperative EPF accounts from earning interest. Inoperative EPF accounts are those where there have been no contributions by an employee or their employer for 36 months.
The Central Board of Trustees (CBT), the highest decision making body of the EPF organisation, will meet to review its 2012 order. CBT is a tripartite body including representatives from the government, industry and workers. Labour minister Bandaru Dattatreya is the chairperson of the board.
There are close to 40 million accounts out of the total 150 million that are lying inactive with Rs 27,000 crores worth of deposits in them.
The decision to stop the payment of interest to such accounts was taken in 2012 in order to dissuade workers from making their accounts inactive and encourage them from merging them with an active one.
A move to review the 2012 decision comes in the backdrop of new EPF rules introduced last month that bar employees from withdrawing their entire PF amount till they turn 58.
While earlier one could withdraw their entire EPF balance after two months of leaving a job, the new rules notified on February 10 mandated one can now withdraw only ones own share of EPF deposits, along with the interest earned on that amount.