While the earlier announced news that EPF will offer lowered interest rate of 8.5% might have affected you, the current crash in the stock markets, which saw frontline indices saw heavy sell off and dived by over 30% in March alone could further dent your EPF returns.
As per a CBT report, the EPFO's equity investment have taken a hit by Rs. 27000 crore and if this decline in the EPFO's corpus which though is only 6% into equities, you as a subscriber in EPF for the previous fiscal may not be able to get more than 7% credit as interest for your contribution to EPF account which is primarily to serve during sunset years.
And this steep 1.5% decline in pay out for provident fund subscribers can be enormous and so what is being suggested that they liquidate their equity holding and pay off from the proceeds to EPF account holders.
"The EPFO will give 8.5% returns as announced in the CBT meeting. How this will impact the corpus and future returns is something we shall see next year," says Virjesh Upadhyay, General Secretary of the Bharatiya Mazdoor Sangh and member of the CBT.