A great update has come for EPF (Employee Provident Fund) subscribers. Till now, interest was given only till the end of the previous month, but now interest will be available till the settlement date. Let’s understand this change and its other aspects in depth.
What is this new rule?
Interest will be paid till the settlement date
EPFO has decided that subscribers will now get interest till the date of settlement of their claim. Earlier, in claims which were settled till the 24th, interest was given only till the previous month. Claims coming after the 25th did not get interest.
Benefits:
- Increase in financial benefits.
- Customer complaints will be reduced.
- Transparency and efficiency will improve.
New changes in investment
Investment in infrastructure and real estate
EPFO will now invest in InvITs and REITs issued by public sector units. This will strengthen the portfolio and give better returns to the members.
Advantages of InvITs and REITs:
- Helps in diversification.
- Better long-term returns.
- Risk reduction.
New rule of ETF redemption policy
EPFO has adopted a new policy for investment in ETFs (like CPSE and Bharat 22 ETFs). A minimum holding period of 5 years will be mandatory, and it will be ensured that the returns are higher than government securities.
Improvement in claim settlement
Record breaking performance
This financial year, EPFO has settled 3.83 crore claims, amounting to a total of ₹1.57 lakh crore. This is slightly less than the previous year’s figure of 4.45 crore claims and ₹1.82 lakh crore, but signs of improvement are clear.
Auto-settlement facility
Now the limit of auto-settlement has been increased from ₹50,000 to ₹1 lakh.
The following types of claims come under this:
- Advance for housing.
- Advance for marriage and education.
- Emergency financial needs.
Key initiatives
EPFO is constantly working towards improving its services. The following actions have been taken since the last meeting of the CBT:
- Improvement in services: Quick resolution of customer issues.
- Digital process: Speeding up auto-processing of claims.
- Customer awareness: Educating members on their rights.
What does this change mean?
Direct benefit for customers
EPFO members will now get maximum returns on their investments. Those who were earlier worried about the loss of interest can now heave a sigh of relief. This move is a major reform from the EPFO.
Future Plans
EPFO is working on the following to make its services even better:
- Expanding the digital interface.
- Looking for new investment opportunities.
- Keeping interest rates stable.
Conclusion
This new rule of EPFO will definitely benefit the subscribers. Getting interest till the settlement date will increase both transparency and financial security. Along with this, improvement in the investment and claims process will further strengthen the trust in EPFO.
FAQs
- What is the main objective of this change of EPFO?
To give maximum financial benefits to the members and increase transparency in the process.
- Will this rule apply to all members?
Yes, it will be applicable to all EPF subscribers.
- What is the auto-settlement limit?
Now the auto-settlement limit has been increased to ₹ 1 lakh. - What is the new investment model of EPFO?
Now investment in InvITs, REITs and ETFs will be given priority. - How long will it take to settle claims?
Under the new process, it will take less time to settle claims than before.