• Notification Date: 17-02-2025
• Notification No: N/A

EPFO Schemes Interest Stabilisation Fund to Generate Stable Returns to 65 Million Subscribers

The Employees' Provident Fund Organisation (EPFO) is mulling offering its 65 million subscribers fixed interest rates. The government is also thinking of establishing an interest stabilisation reserve fund to protect subscribers from market volatility in returns, particularly in the case of a fall in the market.

The fund will try to keep interest rates stable irrespective of market conditions. The excess interest earned every year will be retained to form the reserve so that subscribers still receive periodic returns when EPFO's investment returns decrease during lean seasons. This will avoid sudden drops or increases in interest rates owing to market fluctuations.

The scheme, which is at the conceptual stage now, may be rolled out as early as 2026-27, subject to clearance from the central board of trustees of the EPFO. The labour ministry has already commissioned a study to prepare for this fund that would provide the subscribers with a safe and sure retirement fund.

This step is in the context of volatile EPFO interest rates ranging from a 12% peak in 1989-90 to a historic low of 8.10% in 2021-22. The new reserve fund would ensure that the interest rates do not swing wildly and all EPFO members enjoy a financially secure future.